If you’ve thought about converting your traditional IRA into a Roth IRA – now may be the time. Why? Well, with the current downturn in the stock market due to COVID-19, and low tax rates, the conversion is less costly for investors right now. READ MORE +

Now that President Trump has declared COVID-19 a national emergency, payments providing relief from the pandemic may be considered Qualified Disaster Relief Payments under Section 139 and have tax benefits for employees and employers. READ MORE +

In this blog, SALT Partner Jay Brower examines the “Pass Through Business Alternative Income Tax Act,” newly enacted by New Jersey Governor Phil Murphy, and the effect it will have on NJ business taxes in 2020 and beyond. READ MORE +

Earlier this month, the IRS and the Treasury Department gave taxpayers an early holiday present by issuing Final Treasury Regulations related to investing in Qualified Opportunity Funds. Partner Michael Hurwitz and Principal Alan Blecher discuss the top 10 issues taxpayers face under these new regulations. READ MORE +

The “soft cap” provision for EO-38 compensation was found unconstitutional by the New York Court of Appeals and was removed from regulation. Xixi Dong examines what this means for New York's nonprofit organizations. READ MORE +

On September 25, 2019, the IRS released another form in draft status: federal Form 8997 “Initial and Annual Statement of Qualified Opportunity Fund Investments.” It requires even more information to be reported concerning these investments by eligible taxpayers. READ MORE +

In the blog, Co-Partner-in-Charge of Real Estate Abe Schlisselfeld remarks upon Marks Paneth’s New York Real Estate State of the Market seminar, which featured some of some of the biggest names in New York real estate. READ MORE +

John D'Amico, Director in the Professional Standards Group, examines welcomed new guidance from FASB that will help organizations determine if revenue transactions should be accounted for as contributions or as exchange transactions. READ MORE +

Retailers, wholesalers, service providers and other businesses have all begun to prepare for the effect that the ruling will have on how they collect sales tax. However, it may surprise some nonprofit organizations to hear that Wayfair could affect them too. READ MORE +

Director Lisa Tripi discusses the growing importance for hotel owners to find innovative ways to increase their occupancy rates and highlights how one NYC hotel is setting their sights even higher than 100 percent. READ MORE +

On July 26, 2019, the IRS issued a news release stating that they have begun sending letters to taxpayers with cryptocurrency transactions who may have failed to report income and pay taxes on these transactions.
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The energy investment tax credit is an important federal policy designed to enhance the growth of solar energy and incentivize clean sustainable energy throughout the United States, but without congressional action, it may not continue past 2021. READ MORE +

Though FASB has delayed the implementation of the new lease accounting standards for nonprofit organizations, partner Scott M. Brenner explains why the time for organizations to prepare for these new standards is still now. READ MORE +

Though New Yorkers had mixed reactions to Amazon’s decision not to pursue building an additional headquarters in Long Island City earlier this year, word on the street is that the e-commerce giant is not done with New York City yet. READ MORE +

With the passage of a dramatically new rent regulation law in New York State, Abe Schlisselfeld, Co-Partner-in-Charge of Real Estate, breaks down the most significant changes and their far-reaching impact on the real estate industry. READ MORE +

In this blog post, Marks Paneth professional Eduard Suleymanov will answer several questions pertaining to who is eligible for the new Section 199A deduction and how that deduction can be maximized. READ MORE +

As federal legalization of marijuana appears to be looming nearer, Partner Michael Hurwitz takes a closer look at whether it would be enough to alleviate tax challenges that marijuana businesses are facing under IRC Section 280E. READ MORE +

The Tax Cut and Jobs Act does indeed allow individuals to take the 20% deduction against REIT dividend distributions that yields an effective tax rate of 29.6% or 37% * 80% for upper bracket filers. READ MORE +

While much of the talk surrounding Opportunity Zones is about "getting ready to get going," Co-Partner-in-Charge of Real Estate Abe Schlisselfeld examines what investors should focus on when it's dealmaking time. READ MORE +

Director Georgia Stamelos helps clear up the mystery surrounding change orders and outlines five steps that can be taken to help minimize the effect of change orders on the timing and cost of a project. READ MORE +

The new Centralized Partnership Audit Regime presents numerous challenges, as well as new reporting requirements for the U.S. partnerships. Real Estate Director Steve Brodsky outlines some key take-aways. READ MORE +

Partner Darya Shneyder examines how the real estate development and finance sectors have made strides in recent years toward advancing career opportunities for women and encouraging the efforts of female entrepreneurs.
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With the potential tax savings opportunities presented by the TCJA and the new Section 199A passthrough deduction, now is a good time for both employers and workers to determine if they are appropriately classified. READ MORE +

Much has been written lamenting the tax impact that certain provisions of the Tax Cut and Jobs Act have had on small business owners. In this blog, Tax Partner Mordecai Lerer outlines two ways that small business owners can benefit under the TCJA. READ MORE +

The Tax Cuts and Jobs Act (TCJA) has changed the charitable giving landscape and given donors reasons to reassess the structure of their charitable giving plans. In this blog, Partner Scott Brenner suggests ways board members and fund developers can speak to their donors about making sound philanthropic decisions under the new tax law. READ MORE +

Under “new” section 163(j), enacted as part of the Tax Cut & Jobs Act (TCJA), the deductibility of interest expense is now limited to the sum of (1) business interest income, (2) 30% of adjusted taxable income (ATI) and (3) floor plan financing interest for tax years beginning after December 31, 2017. READ MORE +

The market corrections in November and December of last year signaled an uneasiness on the part of investors who were looking past a still fundamentally happy, bubbling economy and toward a future state that is rife with uncertainty. READ MORE +

As competition to attract and retain high-quality commercial tenants has intensified, it becomes more important for landlords to be creative in enhancing their office and common spaces to suit the desire of employees to work in environments that are collaborative and stimulating. Let’s look at some key elements. READ MORE +

Qualified Opportunity Zones have been a hot topic in the real estate industry since the program was introduced in the Tax Cuts and Jobs Act of 2017. Abe Schlisselfeld, Co-Partner-in-Charge of the Real Estate Group, blogged about the complex opportunities of this tax-savings vehicle from the DC Finance Real Estate and Family Office special meeting on Opportunity Zones. READ MORE +

With the tax reform act passed last year, many businesses owners who run their businesses as pass-through entities, such as S Corporations and partnerships, will benefit from the new Sec. 199A business income deduction. This deduction will allow qualifying taxpayers to benefit from a 20% reduction in the federal tax rate on their net ordinary business income from their respective flow-through entity. READ MORE +

The Tax Cuts and Jobs Act introduces a new excise tax on excessive compensation at applicable tax-exempt organizations. Learn which employees could be impacted and the actions nonprofit Boards should take now to identify potential tax liabilities. READ MORE +

With half of the year already behind us, many taxpayers are looking ahead to their 2018 taxes and wondering how their tax situations will change under the new tax law. Marks Paneth partner Kurt Kiess explains why the outlook for taxpayers in high-tax states might not be as bad as originally predicted. READ MORE +

Certain exemptions under the federal securities laws require that investors in private funds and other unregistered securities qualify as “accredited investors” or “qualified purchasers.” If your trusts or family investment vehicles include these interests, structure the entities appropriately to make sure they qualify. READ MORE +

Telecommuting is one employee benefit not-for-profits can consider to enhance recruiting efforts, reduce expenses and promote greater productivity. Careful consideration of key issues such as policy, communication and fairness are essential to making these flexible arrangements work for both your employees and your organization. READ MORE +

Homeowners who are eligible for certain tax breaks in 2017 may find these home-related tax benefits not as valuable when they file their 2018 returns. Read more about the new provisions affecting homeowners, such as property tax deductions, mortgage interest, home equity loans and home office expenses. READ MORE +

When a nonprofit board starts the search process for top talent, particularly at the executive director/CEO-level, it helps to start with a consideration of what compensation options are available to attract the best candidates. READ MORE +

Normally when appreciated business assets such as real estate are sold, tax is owed on the appreciation. But there’s a way to defer this tax: a Section 1031 “like kind” exchange where, instead of selling appreciated property, you exchange it solely for property of a “like kind.” Virtually any type of real estate will qualify as long as it’s business or investment property. But the Tax Cuts and Jobs Act generally eliminates this favorable tax treatment for personal property. Considering a like-kind exchange? READ MORE +

The Tax Cuts and Jobs Act established a deduction based on a noncorporate owner’s qualified business income (QBI). It’s available to individuals who own interests in pass-through business entities. READ MORE +

Donors, watchdog groups and the media all pay close attention to a not-for-profit’s Form 990, so your board must prioritize financial governance. Finance and audit committees should focus on activities over which they have the most direct influence. For example, does your nonprofit have an operating reserves policy and are your reserves adequate? If you’re having trouble recruiting qualified board members to sit on financial committees, look for professionals such as bankers and CFOs. Or contact us to help you find board members or serve as an independent advisor. READ MORE +

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. A casualty is a sudden, unexpected or unusual event, such as a natural disaster, fire, accident, theft or vandalism. Many rules and limits apply; some are loosened for victims of Hurricanes Harvey, Irma and Maria and certain California wildfires. For 2018 through 2025, this deduction is suspended except for losses due to an event officially declared a disaster by the President. READ MORE +

Repairs businesses made to tangible property (such as buildings, machinery, equipment or vehicles) last year generally can be immediately expensed and fully deducted on 2017 income tax returns. But costs incurred last year to improve such property must be depreciated over a period of years, providing a much smaller 2017 deduction. Distinguishing between repairs and improvements can be difficult. Fortunately, some IRS safe harbors can help. READ MORE +

Every business experiences occasional cash shortages. But, if you’re lucky, you may find a hidden pot of gold in your balance sheet using the cash gap. This metric is a function of the timing difference between when companies order materials and pay suppliers and when they receive payment from their customers. By focusing on three balance sheet accounts (inventory, receivables and payables) you can generate extra cash and lower financing costs. Contact us for help calculating your company’s cash gap and using it to manage working capital more efficiently. READ MORE +

If your estate plan includes trusts, you may have a good reason for wanting to keep them a secret from the beneficiaries, such as your children. But, don’t run afoul of state law, which may require trustees to disclose information to beneficiaries. One way to avoid disclosure requirements is to not name your children as beneficiaries and, instead, grant your spouse a power of appointment over the trust. Your spouse can direct trust funds to your children as needed, but because they’re not beneficiaries, the trustee won’t be required to inform them about the trust. READ MORE +

If your not-for-profit’s program lineup has remained unchanged for years, consider using the tradition of spring cleaning to review your offerings. Some might be due for replacement. Start by surveying stakeholders about which of your nonprofit’s programs are the most and least effective. If you don’t already have goals, as well as strategic, realistic and timely metrics, for your programs, set them now. As you replace programs, keep in mind that new ones can be variations of old ones. But no program that overspends can be successful. READ MORE +

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on not only the amount you give, but also what you give (for example, cash, property or services), whether your total donations for the year exceed certain income-based limits, whether you receive a benefit from the charity, and even how the charity uses the gift. Other rules and limits also apply, and the TCJA could affect your deductions for your 2018 donations. READ MORE +

In a near record-low unemployment economy, with professional opportunities abounding for competent business executives, recruitment efforts by organizations in the not-for-profit sector can be challenging to say the least. Not-for-profit organizations operating with limited budgets and resources can find it challenging to develop compensation programs as attractive as their for-profit counterparts. The good news is that there are non-financial compensation alternatives available as well. READ MORE +

The federal income tax filing deadline for calendar-year partnerships, S corporations and LLCs treated as partnerships or S corporations for tax purposes is March 15, about a month earlier than the deadline for personal returns. If you haven’t filed your partnership or S corporation return yet, you may be thinking about an extension. An extension can be tax-smart if you’re missing critical documents or an unexpected life event is preventing you from devoting sufficient time to your return now. But there are additional considerations. READ MORE +

Classifying shareholder advances is one of the gray areas in financial reporting. When deciding whether to report advances as debt or equity, ask yourself the following questions: Does management intend to repay the loan? Can the company realistically repay it? Have market-rate terms been negotiated and followed? And how is the transaction classified for tax purposes? Shareholder advances present financial reporting challenges. We can help you address those challenges and adequately disclose these transactions in your financial statement footnotes. READ MORE +

If you’re currently caring for both your children and your aging parents, you’re part of a growing segment of the population known as the “sandwich generation.” If your care includes providing financial support to your parents, your estate planning may have to expand to include them as well as your children. To provide for your parents in the event you predecease them, consider having your estate plan establish a trust for their benefit, with any remaining assets passing to your children when your parents die. READ MORE +

Cloud computing uses a network of remote third-party servers made available online. Rather than relying on your not-for-profit’s own computers or server, you remotely share software and storage to process, manage and share information. There are several advantages to using the cloud: lower costs, scalability and easy offsite access. And most reputable services boast stronger security, including firewalls, encryption and authorization restrictions, than your own nonprofit could afford to put in place on its own. READ MORE +

If you’re considering a home equity loan, know that, as of Jan. 1, the rules have changed under the Tax Cuts and Jobs Act. The IRS recently provided information about these loans and the news is good. READ MORE +

If you purchased qualifying business property by Dec. 31, 2017, you may be able to take advantage of Sec. 179 expensing on your 2017 tax return. Sec. 179 allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. For tax years that began in 2017, the maximum Sec. 179 deduction is $510,000. For the 2018 tax year, the Tax Cuts and Jobs Act increases the maximum Sec. 179 deduction to $1 million. READ MORE +

Does your company do contract work? If so, consider using job cost reporting to improve financial efficiency and profits. This management accounting tool can benefit many businesses, from homebuilders and architects to contract manufacturers and auto body shops. An effective system starts with smart estimates and forethought to properly code, allocate and compare expenses throughout the life of the project. As your business grows, we can help you rely less on gut instinct and more on solid facts from an effective job costing system. READ MORE +

If you’re planning on buying a home that you one day wish to pass on to your child and estate taxes are a concern, consider a joint purchase. This technique is based on the concept that property can be divided not only into pieces, but also over time. You buy a current interest in the property and your child buys the remainder interest. If you both pay fair market value for your respective interests, the transfer from one generation to the next should be free of gift and estate taxes. But there are downsides. READ MORE +

Corporate matching can double the value of donors’ gifts, a bonus no not-for-profit organization can afford to pass up. To encourage financial supporters and their employers to participate in such programs, draw up a list of companies in your area that offer matching and post it on your website’s donation page. Also use the list to reach out to existing donors you know work for those companies. Another option is to set up your own matching program by securing pledges from board members and major supporters to match gifts. READ MORE +

If you moved for work-related reasons in 2017, you might be able to deduct some of the costs on your 2017 return. But if you move in 2018, the costs likely won’t be deductible. The Tax Cuts and Jobs Act suspends the moving expense deduction for 2018–2025, except for military members in certain situations. To deduct 2017 work-related moving expenses, you must pass a distance test and a time test. Deductible expenses generally include such costs as move-related travel (but not meals) and packing and transporting your personal property. READ MORE +

If you hired from certain “target groups” in 2017 and obtained proper certification, you can claim the Work Opportunity tax credit (WOTC) on your 2017 return. Also keep the WOTC in mind in your 2018 hiring. Despite its proposed elimination, the credit survived the final version of the Tax Cuts and Jobs Act that was signed into law in December. Examples of target groups include qualified veterans, the long-term unemployed, ex-felons and certain government assistance recipients. The credit ranges from $2,400 to $9,600 per hire. READ MORE +

What are your financial reporting goals? For-profit companies strive to maximize profits and grow assets. But most nonprofits are satisfied when their revenue covers operating costs. New accounting rules go into effect in 2018 that will change how nonprofits classify items and expand their disclosure requirements. Regardless of whether an organization operates for profit or not, it’s essential to produce timely financial statements that stakeholders can trust. READ MORE +

Donating to charity can reduce your taxable estate and benefit your favorite organizations. By making donations during your lifetime, you can claim income tax deductions. For your donations to be deductible, they must meet certain IRS criteria. For example, contributions generally are deductible only in the tax year they’re made: If you pledged $5,000 in October 2017 but paid only $1,500 of your pledge by Dec. 31, 2017, you’re allowed to deduct only the $1,500 amount on your 2017 tax return. READ MORE +

Your not-for-profit’s internal audit function provides independent assurance of compliance with internal controls as well as laws, regulations and contracts. Auditors are capable of uncovering potential risks such as fraud, insufficient funds and reputational damage. But internal auditors can offer your organization more than risk assessments and audit plans. They may serve as internal consultants, providing insights gathered on issues such as operational efficiencies. Or they may help evaluate strategic opportunities. READ MORE +

The recently passed Bipartisan Budget Act of 2018 included an extension of the tuition and fees deduction. This is one of a few higher education tax breaks families with college or grad students may be able to claim on their 2017 returns. There’s also the American Opportunity credit and the Lifetime Learning credit. In most cases you can take only one break per student, and, for some breaks, only one per tax return. Other rules and limits also apply. To learn which break(s) will provide you the greatest savings on your 2017 tax return, contact us. READ MORE +

Business owners: A Simplified Employee Pension (SEP) may give you one last 2017 tax and retirement saving opportunity. You can establish a SEP IRA for 2017 and make 2017 contributions as late as the 2018 due date (including extensions) of your income tax return. Contributions are discretionary and may be as large as $54,000 for 2017. Generally, other types of retirement plans must have been established by Dec. 31, 2017, for 2017 contributions to be made (though many also allow 2017 contributions in 2018). Additional rules and limits apply. Contact us for details. READ MORE +

S corporations must comply with strict requirements or risk losing their tax-advantaged status. In an estate planning context, it’s critical that any trusts that will receive S corporation stock through the operation of your estate plan be eligible shareholders. Potentially eligible trusts include grantor trusts, testamentary trusts, QSSTs and ESBTs. If you have S corporation stock that will be distributed to a trust, we can help you assess whether its terms could inadvertently disqualify the S corporation. READ MORE +

Three questions can help you decide whether your not-for-profit is ready to hire new staffers. First, do you need employees? This may seem obvious, but it’s possible that volunteers can help pick up the slack or that current staffers are underused. Second, do you have the money? Even if financial support is increasing, you need to make the most of any new staffing budget. Finally, is outsourcing an option? It may be cheaper to outsource such functions as accounting, IT and HR work. READ MORE +

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act has reduced the threshold from 10% of adjusted gross income to 7.5% for 2017 and 2018. Contact us if you have questions about what expenses are eligible and whether you can qualify for this itemized deduction on your 2017 tax return. We can also share tips for maximizing your 2018 medical expense deduction. READ MORE +

Bonus depreciation allows businesses to offset the costs of investing in equipment and other qualified assets more quickly. Claiming bonus depreciation on your 2017 tax return may be particularly beneficial. Why? Deductions save more tax when rates are higher, and most businesses’ tax rates will go down in 2018 under the Tax Cuts and Jobs Act. How much can you save? The break allows additional first-year depreciation of 50% or 100% for 2017, depending on when the asset was acquired and placed in service. READ MORE +

Auditors closely evaluate how you report work in progress (WIP) inventory. Why? WIP relies on management’s estimates. Inexperienced or dishonest managers sometimes inflate these estimates, which makes the company appear healthier than it really is. Auditors consider whether allocations of materials, labor and overhead cost appear reasonable. They also monitor how revenue is being recognized based on product sales or the completion level of outstanding work. We can help you make reliable estimates and understand how to report WIP and revenue with confidence. READ MORE +

Gifting assets to loved ones is a simple way to reduce your taxable estate. What may not be as simple is determining whether you need to file a gift tax return (Form 709). For example, a 2017 return must be filed by April 17 if you made outright gifts of cash to any one person exceeding the $14,000 annual exclusion amount. But a return doesn’t need to be filed if you paid qualifying educational expenses on behalf of someone else directly to an educational institution. Contact us to learn more about when a gift return is required and when it’s simply a good idea. READ MORE +

Thousands of not-for-profits lose their tax-exempt status every year because they’ve neglected to file required annual forms with the IRS for three consecutive years. If your organization is on the revocation list and seeks to re-attain its exempt status, file Form 1023 or Form 1024 with supporting documentation. This includes statements that explain your failure to file and steps you’re taking to prevent future failures; returns for all taxable years during and after the nonfiling period; and a declaration signed by an officer or director. READ MORE +

If you itemize, you can deduct either state and local income taxes or state and local sales taxes. Deducting sales tax can be valuable if you reside in a state with no or low income tax or purchased a major item, such as a car. The deduction for state and local taxes (including income or sales tax, as well as property tax) had been on the tax reform chopping block. It survived, but, for 2018 through 2025, the Tax Cuts and Jobs Act imposes a new limit: Your total deduction for all state and local taxes combined can’t exceed $10,000. Contact us to learn more. READ MORE +

When it comes to a nonprofit organization getting in potential audit trouble with the IRS, it will most likely start with IRS Form 990. Officially known as the “Return of Organization Exempt from Income Tax”, this form provides the public (and the IRS) with a nonprofit organization’s financial information. READ MORE +

Providing employee benefits can help businesses attract and retain the best workers. But the cost can be out of reach for some small businesses. Two tax credits can help make benefits more affordable for eligible small employers: 1) a credit equal to as much as 50% of health coverage premiums paid, and 2) a credit of up to $500 for creating a retirement plan. READ MORE +

Need to unlock some cash? Consider targeting your working capital. That is, collect receivables faster, minimize inventory and defer payments to suppliers. These strategies require finesse; you don’t want to compromise relationships with customers and suppliers. But the benefits are often worth the risks. By cutting the “fat” from these accounts, you can generate cash to maintain your company’s competitive edge and keep it in good standing with stakeholders. For more ideas on how to manage balance sheet items more efficiently, contact us. READ MORE +

Life insurance can offer significant estate planning benefits even if estate tax isn’t a concern for your family. For example, you can use life insurance to replace wealth that’s lost to long term care (LTC) expenses for you or your spouse. Although LTC insurance is available, it can be expensive, especially if you’re already beyond retirement age. For many people, a better option is to use personal savings and investments to fund LTC needs and to purchase life insurance to replace the money that’s spent on such care. READ MORE +

“Strategic alliance” is a blanket term typically used to represent a wide range of not-for-profit affiliations (including joint ventures, which involve a more formal, contractual relationship). They can have important benefits for all parties, but the success of these alliances depends on careful planning and oversight. Before finalizing an arrangement, your nonprofit should ensure that the other party shares your values and is able to live up to its financial commitments. Also consider how your donors will feel about the alliance. READ MORE +

For 2018, fewer taxpayers will be eligible for a home office deduction. Employees claim home office expenses as a miscellaneous itemized deduction. For 2017, this means there’s a tax benefit only if these expenses plus other miscellaneous itemized expenses exceed 2% of adjusted gross income. For 2018, the Tax Cuts and Jobs Act suspends miscellaneous itemized deductions subject to the 2% floor. But if you’re self-employed, you can deduct eligible home office expenses against self-employment income. Additional rules and limits apply; contact us for details. READ MORE +

The Tax Cuts and Jobs Act (TCJA) curtails business deductions for meals, entertainment and transportation. Under the TCJA, deductions for business-related entertainment expenses, once 50% deductible, are disallowed. Meal expenses related to business travel are still 50% deductible, but the 50% rule now also applies to meals provided on an employer’s premises for its convenience. The TCJA also eliminates employer deductions for providing employee transportation fringe benefits, such as parking allowances and mass transit passes. READ MORE +

Do you read the fine print in financial statement footnotes? It’s often worth the effort. Comprehensive disclosures contain a wealth of valuable information and can reveal hidden risk factors, such as unreported or contingent liabilities, related-party transactions, accounting changes (including justification and impact) and significant events that could have an adverse effect on future performance. Contact us to discuss concerns that arise when reviewing your company’s footnotes or the disclosures made by publicly traded competitors and potential M&A targets. READ MORE +

The Tax Act and Jobs Act has doubled the federal estate tax exemption, which means fewer families will be subject to estate taxes. But it’s important to consider how state estate or inheritance taxes may affect you. One option is to move to a state that imposes low or no death taxes. But moving to a tax-friendly state doesn’t necessarily mean you’ve escaped taxation by the state you left. Unless you’ve cut all ties with your former state, there’s a risk that the state will claim you’re still a resident and are subject to its estate tax. Contact us to learn more. READ MORE +

The Tax Cuts and Jobs Act (TCJA) contains some provisions affecting not-for-profits. Perhaps most concerning is the nearly doubled standard deduction, which is likely to discourage some taxpayers from making charitable contributions. In addition, the higher estate tax exemption may reduce the number and size of major gifts made by wealthy donors. The TCJA further mandates that nonprofits calculate unrelated business taxable income separately for each unrelated business and imposes a 21% excise tax on certain highly compensated executives. READ MORE +

While many provisions of the Tax Cuts and Jobs Act (TCJA) will save businesses tax, one break it eliminates is the Section 199 deduction. Often referred to as the “manufacturers’ deduction,” this potentially valuable break, when available, can also be claimed by eligible construction, engineering, architecture, computer software production and agricultural processing businesses. Under the TCJA, 2017 is the last tax year noncorporate taxpayers can take the deduction (2018 for C corps.). READ MORE +

The Tax Cuts and Jobs Act, in addition to generally reducing individual tax rates, eliminates personal exemptions, increases the standard deductions and expands the child credit. For some taxpayers, a higher standard deduction may compensate for lost exemptions and even provide additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill, depending in part on how much they can benefit from child credit enhancements. These changes are just the tip of the iceberg. READ MORE +

How much is your business worth? The answer lies in your financial statements. The balance sheet serves as the basis for the cost approach, though adjustments may be needed to align the book values of assets and liabilities with their fair market values. Likewise, the income statement and statement of cash flows can be used to derive value from 1) discounting techniques under the income approach, and 2) pricing multiples under the market approach. READ MORE +

A 529 plan is one of the most flexible tools available for college funding, and it can provide significant estate planning benefits. Beginning this year, under the Tax Cuts and Jobs Act, the definition of “qualified education expenses” has been expanded to include not just postsecondary school expenses but also primary and secondary school expenses. For estate tax purposes, all of your contributions, together with all future earnings, are removed from your taxable estate even though you retain control over the funds. READ MORE +

It’s the duty of all not-for-profit board officers, directors, trustees and key employees to avoid conflicts of interest. Any direct or indirect financial interest in a transaction or arrangement that might benefit one of these individuals personally could result in the loss of your organization’s tax-exempt status. Contact us for help if you don’t have in place a conflict-of-interest policy and other safeguards, such as requiring leaders to annually pledge to disclose interests, relationships and financial holdings that could result in a conflict of interest. READ MORE +

The IRS has announced that it will begin accepting 2017 income tax returns on January 29. Filing as close to that date as possible can help protect you from tax identity theft, an all-too-common scam in which thieves file bogus returns using victims’ Social Security numbers. Tax identity theft can cause big headaches and delay legitimate refunds. But if you file first, it will be the return filed by a potential thief that’s rejected, not yours. If you’re getting a refund, you’ll also benefit from getting it sooner. Contact us for help filing early. READ MORE +

Michael McNee, Co-Partner-in-Charge of our Nonprofit, Government & Healthcare Group drew attention to this near-legendary tale of nonprofit fraud during his presentation on combating nonprofit fraud at our 2017 Nonprofit Industry Update Seminar in New York City. READ MORE +

Owners of “pass-through” businesses may see some major (albeit temporary) relief under the Tax Cuts and Jobs Act (TCJA) in the form of a new deduction for a portion of qualified business income (QBI). For tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, owners of entities such as sole proprietorships, partnerships, S corporations and LLCs generally can deduct 20% of QBI, subject to restrictions that can apply at higher income levels. More rules and limits apply; careful planning will be necessary to gain maximum benefit. Contact us for details. READ MORE +

During your financial statement audit, we assess whether the amounts reported on your income statement capture financial performance during the reporting period. This requires us to focus on three main components: 1) revenue, 2) cost of goods sold, and 3) operating expenses. Each component requires a different audit approach, depending on the level of complexity, possible effects on balance sheet items and the potential for manipulation by dishonest employees. Contact us for more information on how we plan to test and verify these accounts this audit season. READ MORE +

If you wish to protect your assets while retaining some control over them, consider an irrevocable trust. Transferring assets to such a trust generally places them beyond your creditors’ reach. And by including a “spendthrift” provision, you can also protect the assets against claims by your beneficiaries’ creditors. A spendthrift provision prohibits your beneficiaries from selling or assigning their interests in the trust, either voluntarily or involuntarily. READ MORE +

At some point, even the most philanthropic individuals experience donor fatigue and start saying “no.” How can you remain engaged with donors and yet keep your fundraising efforts from eroding relationships? Try staggering your attention, contacting important donors in person and the next tier with personal letters and follow-up phone calls. Or limit the number of appeals you make to one or two a year. And, occasionally ask regular donors for nonmonetary support, such as chairing a committee or hosting an event. For more on nurturing your donor base, contact us. READ MORE +

The Tax Cuts and Jobs Act (TCJA) significantly enhances bonus depreciation. You might even be able to benefit when you file your 2017 tax return. Generally, for qualified property placed in service between Sept. 28, 2017, and Dec. 31, 2022, the first-year bonus depreciation percentage increases to 100%. In addition, the 100% deduction is allowed for not just new but also used qualifying property. The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions. Contact us for more information. READ MORE +

The Tax Cuts and Jobs Act generally reduces individual tax rates for 2018 through 2025. It maintains seven tax brackets but reduces the rates for all brackets except 10% and 35%, which remain the same. It also makes some adjustments to the income ranges each bracket covers. For example, the 2017 top rate of 39.6% kicks in at $418,401 of taxable income for single filers and $470,701 for joint filers, but the reduced 2018 top rate of 37% takes effect at $500,001 and $600,001, respectively. Contact us for help assessing what your tax rate likely will be for 2018. READ MORE +

Misstated inventory has played a key role in countless frauds. An infamous example is the scam that happened at drugstore chain Phar-Mor in the 1990s. These types of cases have taught CPAs to be diligent when auditing inventory, especially for clients with multiple locations. Nowadays, expect auditors to 1) review your inventory manual, 2) conduct in-depth analytical procedures, 3) engage in physical inventory counts, and 4) scrutinize general ledger entries. Contact us to discuss how we plan to evaluate your inventory during the coming audit season. READ MORE +

Not-for-profit boards can vary widely, with different duties and expectations for their members. The structure can be anything from a less-involved group that takes its direction from the organization’s leader, to a fully functioning, hands-on board that essentially runs the nonprofit, to boards that fit somewhere in between. “Policy” boards usually make sense for established nonprofits with full staff and volunteer resources, while “working” boards are most common among early-stage organizations. READ MORE +

The Tax Cuts and Jobs Act is a sweeping revision of the tax code that alters tax law affecting individuals, businesses and estates. Focusing specifically on estate tax law, beginning after December 31, 2017, and before January 1, 2026, the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption amounts double from an inflation-adjusted $5 million to $10 million. For 2018, the exemption amounts are expected to be $11.2 million ($22.4 million for married couples). The marginal tax rate for all three taxes remains at 40%. READ MORE +

On December 20, Congress completed passage of the Tax Cuts and Jobs Act. The new law means substantial changes for individual taxpayers. For example, it reduces tax rates for most brackets, nearly doubles the standard deduction and expands the child tax credit. And it provides alternative minimum tax (AMT) and estate tax relief. But it also reduces or eliminates many tax breaks. Most changes affecting individuals are only temporary, generally applying for 2018 through 2025. If you have questions or would like to discuss how you might be affected, contact us. READ MORE +

The recently passed Tax Cuts and Jobs Act includes a multitude of provisions that will have a major impact on businesses. For example, it creates a flat corporate rate of 21% and temporarily provides a new 20% qualified business income deduction for owners of flow-through entities (such as partnerships and S corporations) and sole proprietorships. It also enhances some breaks, but it limits or eliminates many others. The changes generally apply to tax years beginning after December 31, 2017. Contact us for more details and to discuss the impact on your business. READ MORE +

Most estate plans focus on what happens after you die. But if you haven’t made arrangements in the event you become mentally incapacitated, your plan is incomplete. There are tools you can use to ensure that a person you choose handles your affairs in the event you cannot, such as a health care power of attorney. Sometimes referred to as a “durable medical power of attorney” or “health care proxy,” this authorizes your designee to make medical decisions for you if you can’t make or communicate them yourself. READ MORE +

It costs less time and money to retain current members than to engage new ones. To keep current members in the fold, your not-for-profit should focus on three things: needs, value and engagement. Needs might include education, networking opportunities, research, discounts or credentials. (If you’re not sure what members want, ask them!) Value is the unique experience members have when they interact with your nonprofit and its offerings. Engagement means providing members with multiple avenues of participation. READ MORE +

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most limits are unchanged for 2018. The only limits that have increased are for 401(k)s, from $18,000 to $18,500, and defined contribution plans, from $54,000 to $55,000. Limits for SIMPLEs and IRAs remain at $12,500 and $5,500, respectively. Catch-up contributions (for taxpayers age 50 or older) remain at $6,000 for 401(k)s, $3,000 for SIMPLEs and $1,000 for IRAs. Additional factors may affect how much you’re allowed to contribute. Check with us for more details. READ MORE +

A business’s holiday party costs can reduce its taxes, but maybe not after 2017. For 2017, businesses are generally limited to deducting 50% of allowable meal and entertainment (M&E) expenses, but certain expenses, such as a holiday party for employees, can qualify for a 100% deduction. However, the M&E deduction for employee parties (and for many other M&E expenses) will likely be eliminated beginning in 2018 under the Tax Cuts and Jobs Act. READ MORE +

Do you know your company’s strengths, weaknesses, opportunities and threats? SWOT analysis isn’t just for auditors. It can also be a powerful management tool. Typically presented as a matrix, SWOT analysis provides a logical framework for understanding how a business runs. It tells how you’re performing and predicts what outside forces could impact cash flow. We can help you brainstorm ways to leverage strengths and opportunities and offset weaknesses and threats. This insight can be valuable when evaluating 2017 financial results and planning for the future. READ MORE +

As we wrap up the fourth quarter, many nonprofit organizations are reviewing are reviewing and approving 2018 budgets. Let’s take a look at some financial basics for nonprofit board members pertaining to the creation and approval of an annual budget. READ MORE +

During life, you can serve as your living trust’s trustee and manage the assets. However, you must choose a trustee to oversee and administer the trust after your death (and during your lifetime, should you become unable to act as trustee). You generally have two types of trustee to choose from: individual or corporate. The former may be a family member or close friend, a business advisor, or an attorney. The latter may be a financial institution, a bank trust department or a trust company. We can help you determine who the right trustee is for your situation. READ MORE +

When your not-for-profit needs a new facility or an endowment, a capital campaign can be the best way to raise funds. To be successful, your campaign needs a strong leader with vision and stamina. Consider board members or look to community leaders. Next, draw up a list of, say, 1,000 potential donors, and then winnow it to the largest and most likely donors. Be sure to train team members on how to talk to prospects. To make your big goal achievable, break it into smaller objectives and celebrate when you reach each one. READ MORE +

Charitable giving can be a powerful tax-saving strategy: Donations are generally fully deductible, and you control when and how much you give. To ensure you receive your desired tax benefits, remember that, to be deductible on your 2017 return, a donation must be made by Dec. 31, 2017, to a “qualified charity” (one eligible to receive tax-deductible contributions). The charitable donation deduction hasn’t been proposed for elimination or reduction under tax reform, but there still may be reasons to maximize charitable giving this year. Contact us to learn more. READ MORE +

Buying a business vehicle by December 31 can reduce your 2017 tax bill. The vehicle may qualify for Sec. 179 expensing, allowing you to immediately deduct, rather than depreciate over several years, some or all of the cost. The normal Sec. 179 expensing limit of $510,000 generally applies to vehicles weighing more than 14,000 pounds. A $25,000 limit applies to SUVs weighing less than that but more than 6,000 pounds. Lower limits apply to lighter vehicles. But tax reform could affect whether buying in 2017 or 2018 makes more tax sense. READ MORE +

Do you understand how auditors verify account balances and transactions? This knowledge can minimize disruptions when auditors conduct fieldwork and maximize your audit’s effectiveness. Five common sources of “substantive evidence” include: 1) confirmation letters, 2) original source documents, 3) physical observations, 4) comparisons to external market data, and 5) recalculations. Before audit season starts, let’s discuss the types of evidence we expect to gather for each financial statement category. We can help you anticipate document requests and inquiries. READ MORE +

To ensure that your pet is cared for after your death, consider creating a pet trust. It allows you to set aside funds for the animal’s care. After the pet dies, any remaining funds are distributed among your heirs as directed by the trust’s terms. Here’s how it works: You create the trust to take effect either during your lifetime or at death. Typically, a trustee will hold property for the benefit of your pet, and payments to a designated caregiver are made on a regular basis. The trust can also mandate periodic visits to the vet. READ MORE +

If your not-for-profit is struggling financially, you need to come up with creative ways to generate operating cash flow, such as revisiting your mission and programs. Think about cutting programs that strain cash and staff resources but aren’t critical to your mission. Also examine your investment portfolio for assets that aren’t generating operating income, and review permanently restricted endowments. You may be able to spend what was once untouchable original principal if its donor was silent about restrictions or restrictions are no longer practicable. READ MORE +

The year is quickly drawing to a close, but there’s still time to take steps to reduce your 2017 tax liability. You just must act by December 31. Here are 3 ideas: 1) Pay tuition for academic periods that will begin in January, February or March of 2018 (if it will make you eligible for a tax credit on your 2017 return), 2) sell investments at a loss to offset capital gains you’ve recognized this year, and 3) ask your employer if your bonus can be deferred until January. If you’re unsure whether these steps are right for you, consult us before taking action. READ MORE +

How will tax reform legislation affect your financial statements in 2017 and beyond? Proposed changes would lower tax rates, expand the income tax base, reduce or eliminate tax breaks, and shift to a territorial tax regime. If these proposals are signed into law, the effects must be recognized in the period in which the new legislation is enacted, not when the changes go into effect. We can help you anticipate how the effects of tax reform would trickle down to your financial statements and when those changes must be reported. READ MORE +

If you have minor children, arguably the most important estate planning decision you have to make is choosing a guardian for them. A few issues to consider when evaluating potential guardians include their age and financial situation, their values and parenting philosophy, and whether they have homes large enough to make room for your children. It’s also important to choose a second guardian to serve as a backup if your first choice is unable or unwilling to serve. READ MORE +

To make sound decisions, your not-for-profit’s leadership should periodically survey donors and other constituents. How do you design a survey to ensure a high response rate and constructive feedback? First determine what you want to learn and how you’ll use the data you collect. Keep the focus of your survey sharp, isolating a single issue or initiative, and limit the survey’s length. Ideally, it should take no longer than five minutes to complete. And make sure you write unbiased questions. Don’t lead respondents to the answers you want to hear. READ MORE +

Even if your income is high, your family may be able to benefit from the 0% long-term capital gains rate. Giving appreciated stock instead of cash to loved ones in the 0% bracket might allow you to eliminate all federal tax liability on the appreciation, or at least significantly reduce it. The recipients can sell the assets at no or a low federal tax cost. Before acting, make sure the recipients won’t be subject to the “kiddie tax.” Also consider any gift and generation-skipping transfer (GST) tax consequences. For more information, contact us. READ MORE +

One way accrual-basis taxpayers can save tax is to properly record and recognize expenses incurred this year but that won’t be paid until 2018 so they can be deducted on the 2017 tax return. Common examples include commissions, salaries, wages, payroll taxes, advertising, interest, utilities, insurance and property tax. 2017 may be an especially good year to accelerate deductible expenses. Why? Income tax rates for many businesses could drop significantly in 2018, and deductions save more tax when rates are higher. Contact us for more year-end tax planning tips. READ MORE +

As tax reform bills wind their way through Congress, details regarding possible estate tax law changes have emerged. The House bill that passed on November 16 increases the gift and estate tax exemption to $10 million (adjusted annually for inflation) and repeals the estate tax after 2024. The gift tax stays in place, but the rate falls to 35% after 2024. The Senate’s bill (as initially approved by the Senate Finance Committee) also doubles the exemption, but doesn’t repeal the estate tax. What ultimately will happen with tax reform legislation is still uncertain. READ MORE +

The amounts reported on your financial statements are meaningless without a relevant basis of comparison. Experienced business owners know how to benchmark financial performance by computing financial ratios and comparing them over time and against competitors’ results. Three critical areas to focus on include 1) liquidity, 2) profitability, and 3) asset management. There’s no one-size-fits-all approach to financial benchmarking. Each industry and entity is unique. Contact us for help identifying key performance indicators and evaluating your company’s results. READ MORE +

If your new or growing not-for-profit needs some experienced help, consider contracting with an association management company (AMC). AMCs are paid to manage nonprofit businesses, leaving you to concentrate on your organization’s mission. Their clients pool overhead costs, so you pay only for the services you need, which could also include IT, recruitment, employee benefits or training tasks. Most AMCs provide services based on a flat fee or monthly retainer. Contact us for more information about this option’s benefits and how to assess your outsourcing needs. READ MORE +

For most taxpayers “of a certain age” with a tax-advantaged retirement account, as well as younger taxpayers who’ve inherited such an account, it’s critical to take required minimum distributions (RMDs) by year end. After age 70½, you must take annual RMDs from your IRAs (except Roth IRAs) and, generally, defined contribution plans, such as 401(k)s. RMDs also can apply to inherited accounts, including Roth IRAs. If you don’t take RMDs by Dec. 31, you can owe a penalty equal to 50% of the amount you should have withdrawn but didn’t. Contact us with questions. READ MORE +

At this time of year, it’s common for businesses to make thank-you gifts to customers, employees and other business entities. Unfortunately, tax rules limit the deduction for business gifts to only $25 per person per year. But there are exceptions. Here are three: 1) gifts to a company for use in the business, 2) incidental costs of making a gift, such as engraving or shipping, and 3) gifts to employees (though other limits apply and they may be treated as taxable compensation). Be sure to properly track and document qualifying expenses. READ MORE +

Many companies don’t know what to expect during a financial statement audit. Basically, your audit team performs five steps: They 1) accept the engagement, 2) assess industry- and company-specific risks, 3) plan audit fieldwork, 4) gather qualitative and quantitative evidence, and 5) communicate an audit opinion regarding the accuracy and integrity of your financial statements. To maximize the efficiency and effectiveness of your next audit, learn what the audit team does behind the scenes and how you can help facilitate each step. Contact us for more details. READ MORE +

As the holiday season quickly approaches, gift giving will be top of mind, and that should include making annual exclusion gifts before the Dec. 31 deadline. The 2017 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free. An estate tax repeal has been proposed, but even if the estate tax is repealed, it likely won’t be permanent. And current proposals retain the gift tax. So making 2017 annual exclusion gifts can still be a tax-smart move. READ MORE +

To line up businesses and individuals to sponsor your not-for-profit’s special events, and retain them over the long term, be sure to target the right prospects. Refer to your mission statement and focus your efforts on sponsors with similar values and objectives. For example, a literacy charity might ask an educational book publisher to sponsor its annual gala. To convince potential sponsors that your event’s audience is the same demographic they want to reach, use factual historical data and never exaggerate. READ MORE +

Accelerating deductible expenses, such as property tax on your home, into the current year typically is a good idea. Why? It will defer tax, which usually is beneficial. Prepaying your property tax (by Dec. 31) may be especially beneficial this year, because proposed tax legislation might reduce or eliminate the benefit of the property tax deduction beginning in 2018. But it’s still uncertain what the final legislation will contain and whether it will be passed and signed into law this year. We can help you determine the best strategy for your specific situation. READ MORE +

Sec. 179 expensing allows businesses an immediate deduction for the cost of eligible asset purchases (up to certain limits), rather than depreciating them over a number of years. Another depreciation break for assets that qualify is 50% first-year bonus depreciation. To enjoy these breaks on your 2017 tax return, you generally must acquire and place assets in service by Dec. 31. But tax reform could enhance these breaks, so keep an eye on legislative developments as you plan your asset purchases. READ MORE +

Work-in-progress (WIP) reports can be a powerful management tool to help improve profits on long-term projects. Monitoring WIP reports regularly can help you identify problems. For example, you may discover over- or under-billing and profit fade before these problems spiral out of control, allowing you to take corrective action. But WIP reports are only as reliable as the information they’re based on. We can help you understand how to create these reports, what key information to include and how to decipher any unfamiliar accounting terminology. READ MORE +

If you’re in a second marriage, or planning another trip down the aisle, it’s vital to review your estate plan and update your will, trusts and beneficiary designations to name your current spouse where desired. If you have minor-aged children from a previous marriage, consider establishing a trust that directs a trustee of your choosing to manage its assets and control distributions to or on behalf of your children. Doing so can provide peace of mind that the assets will be managed and distributed per your wishes. READ MORE +

People are naturally inclined to make charitable gifts around the holidays. With the end of the year fast approaching, your not-for-profit should think about how to make the most of the season. One way is to strike early. Plan events or solicitations for early December or sooner, before donor fatigue sets in. And rather than blitz every prospect in your database, identify the best prospects. Past donors are more likely to give again and in larger amounts. Personal appeals can encourage a greater commitment from them. READ MORE +

A fundamental tax planning strategy is to accelerate deductible expenses into the current year. This typically will defer (and in some cases permanently reduce) tax. But there are exceptions. One is if the additional deductions this year trigger the alternative minimum tax (AMT). Complicating matters for 2017 is possible tax reform that could repeal the AMT for 2018 and beyond but also limit the benefit of some deductions and eliminate others, making it less desirable to defer expenses to 2018. We can help you determine the best strategies for your situation. READ MORE +

With Veterans Day on Nov. 11, it’s an especially good time to think about how we can support our veterans. One way businesses can do so is to hire them. An added bonus is that the Work Opportunity tax credit (WOTC) can save tax when you hire from “target groups,” including certain veterans. But it could be repealed as part of tax reform. So you may want to consider hiring veterans before year end. The credit amount depends on the target group, wages paid and hours worked. It ranges from $2,400 to $9,600 per hire. READ MORE +

Boardroom and management team diversity can enhance corporate value. Academic research has found that diverse boards lead to better financial reporting quality and greater management accountability after poor financial performance. The Securities and Exchange Commission already requires limited disclosures on boardroom diversity and has plans to expand them. Private companies can benefit from more diverse insights, too. We can help assess your level of diversity and provide voluntary disclosures that showcase your commitment to race, gender and ethnic diversity. READ MORE +

The centerpiece of your estate plan is a will or living trust. Such a document determines who gets what, where, when and how. Another document to consider including is a “letter of instructions” to your heirs. It has no legal authority but can provide valuable guidance to them. A letter of instructions is more than just a listing of assets and their locations. Typically, it will include other items of a personal nature, such as funeral arrangements and people and organizations to be notified upon your death. READ MORE +

Not-for-profit board members need to keep an eye on how well their organizations are meeting key goals and furthering their missions. One of the easiest ways for boards to do this is with a “dashboard” of key performance indicators. Just as an automobile dashboard gives drivers a quick glimpse of their car’s status, a performance dashboard provides an at-a-glance look at an organization’s financial health. READ MORE +

All “income investments” (those that pay dividends or interest) aren’t alike when it comes to taxes. Qualified dividends are taxed at your favorable long-term capital gains rate rather than your higher ordinary-income rate. Interest generally is taxed at ordinary-income rates. So stocks paying qualified dividends might be more attractive tax-wise than CDs and bonds. But there are exceptions. For example, some dividends aren’t qualified and are subject to ordinary-income rates, and municipal bond interest is generally tax-free. Contact us for more details. READ MORE +

A qualified small business (QSB) eligible for the research tax credit can elect to use up to $250,000 of the credit to reduce its payroll tax bill instead of its income tax bill. Generally, a QSB has gross receipts of less than $5 million for the current tax year and hasn’t existed for more than five tax years. To qualify for the credit, a business’s research activities must meet a four-factor test. Expenses that may qualify include research-related wages and supplies, plus 65% of contracted research expenses. READ MORE +

If you’re charitably inclined but concerned about having sufficient income to meet your needs, a charitable remainder trust (CRT) may be the answer. In a nutshell, you contribute stock or other assets to an irrevocable trust that provides you with an income stream for life or for a set term. At the term’s end, the remaining trust assets are distributed to one or more charities you’ve selected. When you fund the trust, you generally can claim a charitable income tax deduction equal to the present value of the remainder interest. READ MORE +

CPAs don’t just offer assurance services on historical financial results. They can also prepare prospective financial statements that predict how the company will perform in the future. Asking these four fundamental questions can help you make more accurate assumptions: 1) How far into the future do you want to plan? 2) How steady is your demand? 3) How much data do you have? 4) How do you fill your orders? We can help you answer these questions using the forecasting practices that make sense for your business. READ MORE +

Preparing your not-for-profit’s annual budget can be a painful process, but several steps can help make the process easier. For example, before you start allocating resources, figure out what they are. This includes not only the amount of your income, but its nature. After all, restricted or planned gifts aren’t necessarily available for spending. Also be careful not to underestimate needs when determining the costs of current and future programs. And account for both direct and indirect expenses. (The latter benefit multiple programs.) READ MORE +

Did you know that if you’re self-employed you may be able to set up a retirement plan that allows you to contribute much more than you can contribute to an IRA or even an employer-sponsored 401(k)? There’s still time to set up such a plan for 2017, and it generally isn’t hard to do. Among your options are a profit sharing plan, a Simplified Employee Pension (SEP) plan and a defined benefit plan. Whether you’re a “full-time” independent contractor or you’re employed but earn some self-employment income on the side, contact us to learn more about your options. READ MORE +

Currently, a valuable income tax deduction related to business real estate is for depreciation. But the depreciation period for such property is long, and land itself isn’t depreciable. To maximize your deductions, first segregate personal property from buildings; depreciation deductions for personal property generally can be taken more quickly. Next, carve out depreciable land improvements from land. Examples include landscaping, roads, and even grading and clearing. READ MORE +

A dynasty trust can protect your wealth from gift, estate and generation-skipping transfer (GST) taxes and help you leave a lasting legacy. Contributions to the trust are considered taxable gifts, but you can minimize taxes by applying your gift and GST tax exemptions. Trust assets can grow and compound indefinitely. The trust makes distributions to future descendants according to criteria you establish. So long as your beneficiaries don’t gain control over the trust, the undistributed assets will bypass their taxable estates. READ MORE +

There are more than 87,000 foundations in the United States. If your not-for-profit isn’t actively seeking grants from these groups, you’re neglecting a potentially significant income source. Get started by visiting the Foundation Center’s online directory at foundationcenter.org. Then talk to staff members at your target foundations about the kind of information they need. Foundations generally like projects that are well defined and data driven with specific goals. READ MORE +

Tax planning for executive compensation such as restricted stock, stock options and nonqualified deferred comp is generally more complex than for salaries, bonuses and traditional employee benefits, especially if you could be subject to the additional 0.9% Medicare tax or the 3.8% net investment income tax. These taxes apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers. If you’re concerned about how your exec comp will be taxed, contact us. READ MORE +

On Oct. 12, an executive order was signed that, among other things, directs the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regs or revising guidance to expand the ability of employers to offer Health Reimbursement Arrangements (HRAs). But HRAs are just one type of tax-advantaged account you can provide employees to help fund their health care expenses. Also available are Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Which one should you include in your benefits package? READ MORE +

Businesses today face unprecedented uncertainty. So, management’s historical means of making accounting estimates may no longer suffice. Allowances for doubtful accounts, goodwill impairment, uncertain tax positions and other estimates involve a level of measurement uncertainty. And highly uncertain outcomes can lead to unintentional errors or intentional misstatement. With audit season just around the corner, let’s discuss your use of accounting estimates in today’s volatile markets. We can help you facilitate audit fieldwork and minimize audit adjustments. READ MORE +

Not-for-profit supporters often donate gifts in kind and services. But properly reporting and assigning value to such donations can be challenging. With gifts in kind, decide whether the item can be used to carry out your mission or sold to fund operations. If so, record its fair market value as a donation and a related receivable (once it’s unconditionally pledged). The value of a donated service should be recognized if it creates or enhances a nonfinancial asset or it requires specialized skills and is provided by a specialist. READ MORE +

If you own life insurance policies at your death, the proceeds will be included in your estate. The way around this problem is to not own the policies when you die. Ownership by your children can be a good option when your primary goal is to pass wealth to them. Proceeds aren’t subject to estate tax on your or your spouse’s death, and your children receive all of the proceeds tax-free. On the downside, policy proceeds are paid to your children outright. This may be problematic if a child has creditor problems. READ MORE +

The extended deadline for filing your 2016 individual federal income tax return is Oct. 16. If you extended your return and know you owe tax but can’t pay the bill, be sure to still file your return by the 16th. This will allow you to avoid the 5%-per-month failure-to-file penalty; you’ll owe only an interest charge. When must you pay the balance due? As soon as possible, if you want to halt the IRS interest charges. You can pay by credit card or take out a loan. But an IRS installment agreement may be less costly. For assistance or more information, contact us. READ MORE +

A cash balance plan can turbocharge a business owner’s retirement savings. In 2017, employer contributions and employee deferrals to defined contribution plans like 401(k)s are limited to $54,000 ($60,000 for employees age 50 or older). Nondiscrimination rules that prevent a plan from favoring highly compensated employees can further reduce contributions to an owner’s account. But cash balance plans are instead subject to a cap on annual benefit payouts in retirement, and contributions may be as high as necessary to fund those benefits. READ MORE +

In October 2015, the OECD issued a report on its G-20 BEPS Project (Base Erosion and Profit Shifting) – which focused on providing governments with solutions for closing the gaps in existing international tax and transfer pricing rules that allow corporate profits to “disappear”, or be artificially shifted to low/no tax environments where little or no economic activity takes place. Much of BEPS centers on intellectual property (IP)-intensive industries. READ MORE +

Financial restatements among public companies are at the lowest level in 15 years. A recent study by research firm Audit Analytics attributes the decrease, in large part, to stronger internal controls. If you want to beef up your company’s controls, consider following the framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Auditors use COSO’s framework to evaluate their clients’ internal controls. Our audit team can help you turn the framework’s abstract concepts into actionable items. Contact us for details. READ MORE +

The $14,000 annual exclusion is limited to gifts of a “present interest,” defined by IRS regulations as “an unrestricted right to the immediate use, possession, or enjoyment of property or the income from property.” Generally, gifts to a trust designed to distribute assets to beneficiaries at a future date won’t qualify. But a Crummey trust satisfies the present interest requirement by giving beneficiaries the right to withdraw trust contributions for a limited period of time. There are additional rules and tax consequences to consider, so contact us for details. READ MORE +

Term limits for not-for-profit board members can be a double-edged sword. They may allow you to easily let go of unsuccessful members without hurting their feelings and create an opportunity for new members with fresh ideas and perspectives to come on board. On the other hand, they may cause you to lose your most dedicated and active members. Also, term limits force your organization to look for qualified replacements and train them more often than you’d probably like. Carefully consider the pros and cons before choosing term limits. Contact us for help. READ MORE +

Out-of-pocket medical expenses may be deductible if they exceed 10% of your adjusted gross income. By “bunching” nonurgent medical expenses into alternating years, you may be able to exceed the floor. The “Unified Framework for Fixing Our Broken Tax Code” President Trump and congressional Republicans released on Sept. 27 proposes, among other things, increasing the standard deduction and eliminating most itemized deductions, which likely would include the medical expense deduction. So bunching such expenses into 2017 may be tax-smart. Contact us to learn more. READ MORE +

Late last summer, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that simplified and improved how nonprofit organizations tell their stories through their financial statements. This has been achieved by redefining classifications and how organizations report net assets, as well as other financial information.
These new standards are designed to help nonprofits provide more relevant and useful information about their resources to key stakeholders – including donors, board members, grantors, creditors and tax authorities. READ MORE +

Typically, it’s better for businesses to defer tax by deferring income to the next year and accelerating deductible expenses into the current year. These strategies could be particularly powerful if tax legislation is signed into law reflecting the “Unified Framework for Fixing Our Broken Tax Code” released by President Trump and congressional Republicans on Sept. 27. Among other things, the framework calls for reduced tax rates for corporations and flow-through entities as well as the elimination of many business deductions. Contact us for more information. READ MORE +

Taxes are anything but certain. So how can you plan your estate when the tax landscape may look dramatically different in the future? Take a flexible approach that allows you to hedge your bets. An irrevocable trust can make it possible to remove assets from your estate now, but give the trustee the authority to force the assets back into your estate if that turns out to be the better strategy. For the technique to work, you must retain no control over the trust assets and the trustee should have absolute discretion over distributions. Contact us to learn more. READ MORE +

Most not-for-profits depend on a big annual event to raise significant funds or attract new members. But as any experienced event planner can tell you, almost no benefit, gala or conference goes off without at least a small hitch. To head off the big hitches, create a crisis management plan that addresses key risks such as severe weather, travel restrictions and natural disasters and lists emergency contact numbers for staffers and vendors. Also ensure that your insurance policy provides adequate coverage. Contact us for help addressing special event risks. READ MORE +

If you’ve cashed in some big gains this year, consider looking for unrealized losses in your portfolio and selling those investments before year end to offset your gains. This can reduce your 2017 tax liability. But beware of the wash sale rule. It prevents you from taking a loss on a security if you buy a substantially identical security within 30 days before or after you sell the security creating the loss. You can recognize the loss only when you sell the replacement security. Contact us to learn more about the ins and outs of saving taxes on your investments. READ MORE +

If you own an unincorporated business with your spouse, you may face high self-employment (SE) taxes. An unincorporated business in which both spouses are active is typically treated by the IRS as a partnership owned 50/50 by the spouses. For 2017, that means you’ll each pay the maximum 15.3% SE tax rate on the first $127,200 of your respective shares of net SE income from the business. But if you can establish that your business is a sole proprietorship or that the partnership isn’t 50/50, you might save SE tax. Contact us to learn more about reducing SE taxes. READ MORE +

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) recently updated its enterprise risk management (ERM) framework. The update includes five components: 1) governance and culture, 2) strategy and objective setting, 3) performance, 4) review and revision, and 5) information, communication and reporting. Effective ERM encompasses more than taking an inventory of your risks; it should be an entitywide process for proactively managing risk. Contact us for help adopting cost-effective ERM practices to help make your business more resilient. READ MORE +

A Health Savings Account (HSA) is a tax-advantaged way to both pay for health care costs and pursue your estate planning goals. HSAs, which must be paired with a high-deductible health plan, allow pretax contributions and tax-free withdrawals for qualified medical expenses. Unused HSA balances can supplement retirement income or continue growing on a tax-deferred basis for your family’s future benefit. But if you name someone other than your spouse as beneficiary, he or she will owe income tax on the HSA balance at your death. Contact us to learn more. READ MORE +

Income from endowment funds may be able to help your nonprofit meet operating expenses, ease cash-flow problems and supplement your annual budget. But you need to control your spending policy. Assuming funds aren’t restricted, nonprofits in most states must conform to provisions of the Uniform Prudent Management of Institutional Funds Act. Within those constraints, define how much of your fund’s income can be spent on operations each year. Generally, this percentage is between 4% and 7% of your average investments. Contact us for additional help. READ MORE +

If you’re not making the maximum 401(k) contribution allowed ($18,000, or, if age 50 or older, $24,000), consider increasing your contribution rate through year end. Traditional 401(k) contributions are pretax, plan assets can grow tax-deferred (you pay no income tax until you take distributions), and your employer may match some or all of your contributions pretax. Plus your paycheck will be reduced by less than the dollar amount of the contribution, because income tax isn’t withheld. Contact us to discuss the best tax and retirement-saving strategies for you. READ MORE +

If business-travel expenses are properly accounted for, reimbursements are generally tax-free to the employee and deductible by the employer. But keeping track of actual costs can be a headache. With per diem rates, employees don’t have to keep receipts; they just document the travel’s time, place and business purpose. The employer simply pays the employee the per diem for the travel destination and deducts it. Rates include lodging, meals and incidental expenses but not transportation. Updated travel per diem rates go into effect Oct. 1. Contact us for details. READ MORE +

Charitable giving is a key part of estate planning for many people. If you’re making gifts during life, generally, it’s advantageous to donate appreciated property to avoid capital gains tax. Because the top capital gains rate for art is 28%, donating art can be particularly effective. Be sure to have art appraised by a “qualified” appraiser. IRS rules detail requirements for appraiser qualifications and appraisal contents. Plus, IRS auditors are required to refer all gifts of art valued at $20,000 or more to the IRS Art Advisory Panel. Contact us to learn more. READ MORE +

With kids back in school, it’s a good time for parents (and grandparents) to think about college funding. One option is a Section 529 plan. It offers the opportunity to build up a large college nest egg via tax-deferred compounding and can be particularly powerful if contributions begin when the child is quite young. Contributions aren’t deductible for federal purposes, but distributions used to pay qualified expenses are typically income-tax-free for both federal and state purposes, thus making the tax deferral a permanent savings. Contact us to learn more. READ MORE +

Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2017. OCT. 16: If calendar-year C corp. that filed an extension, file a 2016 income tax return. OCT. 31: Report income tax withholding and FICA taxes for Q3 2017 (unless eligible for exception). DEC. 15: If calendar-year C corp., pay fourth installment of 2017 estimated income taxes. Contact us for more about the filing requirements and to ensure you’re meeting all applicable deadlines. READ MORE +

Most U.S. businesses use Generally Accepted Accounting Principles (GAAP) to report their financial results. However, some businesses use tax-basis reporting to save time and money. Key differences between these two frameworks can potentially lead to apples-to-oranges comparisons. For example, tax law tends to favor accelerated gross income recognition and depreciation deductions, and not allow taxpayers to deduct other business expenses until the amounts are known. Contact us to discuss the optimal reporting model for your business. READ MORE +

Giving Tuesday was created to encourage Americans to contribute to charity during the holiday season. On the first Tuesday after Thanksgiving (Nov. 28 in 2017), not-for-profit participants use social media to raise money, educate the public about issues and encourage people to volunteer in their communities. If your nonprofit hasn’t made plans to participate, it’s not too late. Try a simple, focused goal your first year. For example, use Giving Day to remind supporters to make their tax deductible gifts by year end. Contact us for more fundraising ideas. READ MORE +

To improve the odds of a successful acquisition, it’s important to devote resources to tax planning before your deal closes. For example, discuss whether and how much each party can deduct their transaction costs and how much in local, state and federal tax obligations the parties will owe upon signing the deal. And if you and your seller use different tax processing software or follow different accounting methods, you need to choose between them as soon as feasible. We can help you ensure you plan properly and minimize any potentially negative tax consequences. READ MORE +

This Labor Day, do two favors for your employees. First, minimize payroll reporting and expense reimbursement errors by switching to an outside payroll company. Second, protect employees’ personal data by obtaining a copy of the payroll provider’s SAS 70 service audit report. These audits evaluate the payroll provider’s controls. If your payroll provider doesn’t have a service audit report, contact us. We can discuss the adequacy of controls with your service provider and plan our financial statement audit accordingly. READ MORE +

If a portion of your wealth is tied up in a closely held business, your estate may lack enough liquid assets to pay estate taxes. Internal Revenue Code Section 6166 permits qualifying estates to defer a portion of their estate tax liability for up to 14 years from the date the tax is due. During the first four years of the deferment period, the estate pays interest only, followed by 10 annual installments of principal and interest. READ MORE +

Audited financial statements can help assure funders and lenders that your not-for-profit is financially sound. But there are three critical audit issues to understand when preparing statements: 1) Your auditor’s role is to provide an opinion on whether statements are free of material misstatements, 2) your board should play a strategic, oversight role in the process, and 3) statements should be analyzed to help you manage your organization. Contact us for help preparing audited financial statements. READ MORE +

Elementary and secondary school teachers and other eligible educators can deduct up to $250 for qualifying classroom supplies they pay for out of pocket. This is an “above-the-line” deduction, which means you don’t have to itemize. Before this special break became available, such expenditures could be deducted only as unreimbursed business expenses under the miscellaneous itemized deduction, subject to a 2% of adjusted gross income (AGI) floor, which could be a difficult threshold to meet. Contact us for details on the educator expense deduction. READ MORE +

When a business provides meals to its employees, generally its tax deduction is limited to 50%. But there are exceptions. One is if the meals qualify as a de minimis fringe benefit. A recent U.S. Tax Court ruling could ultimately mean that more employer-provided meals will be 100% deductible under this exception. The court found that the Boston Bruins hockey team’s pregame meals to players and personnel at out-of-town hotels qualified as a de minimis fringe benefit. But the facts of this case are specific and restrictive. Contact us to learn more. READ MORE +

GAAP financial statements can take weeks or months to prepare. If you want more timely information, consider daily or weekly “flash reports” that provide a simplified snapshot of key financial figures. Flash reports help management proactively identify and respond to problems and weaknesses. But these reports might not always be 100% accurate, and some items might ebb and flow throughout the billing cycle. So, exercise caution when sharing these reports with stakeholders. We can help customize an effective flash report based on what matters most in your industry. READ MORE +

If your estate plan includes a revocable trust (also known as a “living trust”), it’s critical to ensure that the trust is properly funded. Revocable trusts offer significant benefits, including asset management (in the event you become incapacitated) and probate avoidance. But these benefits aren’t available if you don’t fund the trust. To do so, transfer ownership of assets to the trust. Don’t forget to transfer newly acquired assets to the trust to ensure they enjoy its benefits. Also be aware that certain assets shouldn’t be moved to the trust, such as IRAs. READ MORE +

Investment fraud can cause significant financial losses for not-for-profits. But the harm it could cause your reputation with donors and the public may be even worse. To avoid hiring a crooked investment advisor, beware of unrealistic promises, such as annual returns of 20%. Also be wary of fund managers who don’t submit to outside audits or report their results publicly. Instead, look for an advisor who encourages you to discuss goals and risk concerns, and who understands your investment philosophy. Contact us for help finding a trustworthy advisor. READ MORE +

If you convert a traditional IRA to a Roth but discover you’d be better off if you hadn’t converted, it’s possible to undo it. This may be beneficial if the conversion pushes you into a higher tax bracket, you expect your tax rate to go down or the account value has declined. Generally, if you extend your tax return, you have until Oct. 15 of the following year to undo a conversion. (For 2016 returns, the deadline is Oct. 16.) It may make sense to undo the conversion and then redo it. We can provide details on the rules and help you assess your options. READ MORE +

Could a captive insurance company reduce health care costs and save your business taxes? A captive generally is wholly owned and controlled by the employer, like forming your own insurance company. You can customize coverage and charge premiums that more accurately reflect your loss exposure. And you can participate in the captive’s underwriting profits and investment income. Premiums paid to the captive are tax-deductible, and the captive can deduct most of its loss reserves. Contact us to learn more about the tax treatment and other pros and cons. READ MORE +

A new accounting standard on credit losses goes into effect in 2020 for public companies and 2021 for private ones. It replaces the existing “incurred loss” model that financial institutions use now with a new “current expected credit loss” model. By focusing on forward-looking information, the new model will result in earlier recognition of losses and better meet the needs of financial statement users who, leading up to the global financial crisis, were making independent estimates of institutions’ expected credit losses. We can help you apply the new guidance. READ MORE +

Even if there’s no immediate need for your not-for-profit to hire an executive, it’s smart to prepare for the process. That way, you’ll be ready to execute a search when the time arrives. Start by forming a search team made up of board members. This team should draft executive job descriptions that detail the knowledge, skills and attitudes required for positions and discuss compensation philosophy. For example, will your nonprofit compensate in line with similar nonprofits or with similar for-profit positions? Contact us for more compensation information. READ MORE +

One tax being considered for repeal as part of tax reform is the estate tax. It applies to transfers of wealth at death. Its sibling, the gift tax (also being considered for repeal) applies to transfers during life. Yet most taxpayers won’t face these taxes even if they remain in place. For 2017, the federal lifetime gift and estate tax exemption is $5.49 million. Any gift tax exemption you use during life does reduce the amount of estate tax exemption available at your death, but every gift you make won’t use up part of your exemption. Contact us for details. READ MORE +

A reverse audit can help your business find sales and use tax overpayments so you can seek refunds. States may exempt, for example, equipment and utilities used in manufacturing, and custom software, computers and peripherals used for research and development. Unless you’re diligent, you may be missing out on some exemptions to which you’re entitled. A reverse audit can allow you to not only reap tax refunds now for missed exemptions but also update your compliance systems to help ensure you don’t overpay in the future. Contact us to learn more. READ MORE +

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to clarify and improve the accounting guidance for contributions and grants. There has always been some “gray area” in determining whether a grant is an exchange transaction or a contribution – depending on whether the contributor/grantor (the resource provider) received something of approximate equal value in exchange for the resources transferred. Distinguishing between contributions and exchange transactions determines which accounting guidance to follow. READ MORE +

Timing is critical in financial reporting. Under the accrual basis of accounting, the end of the accounting period serves as a “cutoff” for when companies recognize revenues and expenses. However, some companies may be tempted to play timing games to boost financial results or lower taxes. As you adopt new principles-based guidance on reporting contract revenues, expect auditors to pay more attention to accounting cutoffs. Contact us for help complying with the rules and minimizing audit adjustments next audit season. READ MORE +

Despite a generous $5.49 million generation-skipping transfer (GST) tax exemption, complexities surrounding its allocation can create tax traps. The GST tax is a flat, 40% tax on transfers to “skip persons,” such as family members more than a generation below you. To take full advantage of the GST tax exemption, you (or your estate’s representative) must properly allocate it to specific gifts and bequests. If you don’t, you could trigger a costly GST tax bill. But the GST tax might be repealed. Contact us for more information on GST tax planning or tax law changes. READ MORE +

Highly compensated owners and executives often struggle to save enough money to maintain their lifestyles in retirement. A nonqualified deferred compensation (NQDC) plan can help. It’s an agreement that the business will pay out in the future, such as during retirement, compensation that participants earn now. The nondiscrimination rules, contribution limits and distribution rules that apply to most retirement plans don’t apply to NQDC plans. But they are subject to other strict rules. Let us help you decide whether an NQDC plan is a good option for your business. READ MORE +

Your not-for-profit has probably spent a lot of time and effort finding knowledgeable, enthusiastic and committed board members. Unfortunately, what begins as a good relationship can sour over time. If a member consistently monopolizes discussions, treats peers disrespectfully, seems motivated by personal agendas or violates your nonprofit’s policies (for example, on conflicts of interest), you may need to “fire” him or her. Frequently missing meetings or being unwilling to accept or complete tasks also may warrant removal from the board. READ MORE +

Most of the talk about possible tax legislation has focused on wide-sweeping tax reform and taxes under the Affordable Care Act. But another question is whether Congress will extend through 2017 some valuable breaks for individuals that the 2015 PATH Act extended only through 2016. One is the above-the-line deduction for higher education tuition and related expenses. Another is the mortgage insurance premium deduction. And then there’s the exclusion from gross income for mortgage loan forgiveness. Contact us for more information. We’ll keep you up to date. READ MORE +

If your business is a limited liability company (LLC) or limited liability partnership (LLP) and you can be considered a general partner, you can meet any one of 7 “material participation” tests to avoid passive treatment under the passive activity loss rules. The rules prohibit taxpayers from offsetting losses from passive business activities (such as limited partnerships or rental properties) against nonpassive income (such as wages, interest, dividends and capital gains). Contact us to learn about the 7 tests and how to ensure you can meet at least one of them. READ MORE +

Recent breakthroughs and disruptive technologies have made the valuation of emerging companies challenging. The one “looming” question from founders of these companies is: “What is my company really worth?” Or, if you are an investor, “What will I pay for a slice of the multi-trillion-dollar tech sector?” A third perspective might reflect a strategic partner evaluating an acquisition or joint venture opportunity. READ MORE +

Generally, trusts must have one or more human beneficiaries, but there’s an exception for certain “purpose” trusts, such as a noncharitable purpose (NCP) trust. To be valid, an NCP must meet three requirements: 1) Have a purpose that’s certain, reasonable and attainable, 2) not violate public policy, and 3) be capable of enforcement. Typically, an NCP trust is enforced by an “enforcer,” who ensures that the trust’s purpose is fulfilled, and/or a “trust protector,” who’s empowered to modify the trust when its purpose has been achieved or is no longer relevant. READ MORE +

When a business reaches a certain level of success, adding another location might seem like a no-brainer. But be careful. First ask yourself some tough questions about whether that new location will grow your company or stretch it too thin. For example, is there a solid strategic plan driving the expansion? Can your current location sustain its success while you set up shop elsewhere? Is the proposed location already overrun with competitors? Are there other, less risky ways to grow? We can help you analyze your financials to answer these questions and many more. READ MORE +

Many not-for-profits join forces to better serve their clients and cut costs. But even a simple collaborative arrangement can involve complex financial reporting obligations. Costs incurred and revenues generated from transactions with third parties should be reported, on a gross basis on the statement of activities, by the nonprofit that’s considered the “principal” for that arrangement. Payments should be presented according to their nature and certain disclosures should be made by participants. Contact us for more information about reporting joint activities. READ MORE +

With repeal and replace efforts apparently having collapsed for now, it’s a good time for a refresher on the Affordable Care Act’s tax penalty on individuals without “minimum essential” health coverage. The 2017 penalty generally is the greater of: 1) 2.5% of household income above the taxpayer’s filing threshold, or 2) $695 ($347.50 for household members under age 18) times the number of uninsured individuals in a household, limited to $2,085. But the penalty can’t exceed the national average cost of bronze coverage for the household. Contact us for details. READ MORE +

Typically, the more unemployment claims made against a business, the higher the unemployment tax bill. But there are ways to control your unemployment tax costs. First, don’t hire employees to fill potentially short-term needs. To avoid layoffs, use temps instead. If you must hire, hire carefully to increase the likelihood that new employees will work out. And if you must terminate someone, provide severance (which may delay the start of unemployment benefits) and outplacement services (which, if successful, will hasten their end). Contact us for more ideas. READ MORE +

If you expect your estate to have a significant estate tax liability at your death and you want to avoid unintended consequences, be sure to include a well-drafted tax apportionment clause in your will or revocable trust. This clause specifies how the estate tax burden will be allocated among beneficiaries. One apportionment option is to have all taxes paid out of assets passing through your will. Beneficiaries receiving assets outside your will (such as IRAs or life insurance proceeds) won’t bear any tax burden. But other options might better fit your wishes. READ MORE +

Despite the fact that United Way now accepts Bitcoin donations, many not-for-profits remain wary of money that’s neither printed nor backed by a central bank. But there are potential advantages to accepting Bitcoins and other digital currencies. For example, you may be able to accept donations from people worldwide who don’t have easy access to global financial systems. Also, these transactions tend to be low- or no-cost, and there may be tax benefits for donors. But accepting digital currencies also involves significant risk. Contact us for more information. READ MORE +

“Sorry, we can’t help you.” How many times a year do your salespeople say this? Putting a number on lost sales can tell you much about what your customers want. Start by having sales staff log every customer request. Then develop a report that lays out key information, such as estimated potential purchases, lost sales and lost gross profit. Last, run the report monthly and discuss it with your management team to determine your best strategic opportunities. We can assist you in creating a lost sales tracking system that best suits your company’s distinctive needs. READ MORE +

Here are three tax strategies for individuals that can be more effective if you begin executing them midyear: 1) Take steps to stay out of a higher tax bracket, such as deferring income and accelerating deductible expenses or shifting income to family members in lower tax brackets. 2) Sell depreciated investments to generate losses to offset gains you’ve realized this year. 3) Try to bunch medical expenses into every other year to exceed the adjusted gross income floor for deductibility. Contact us for the ins and outs of these and other midyear strategies. READ MORE +

An employee stock ownership plan (ESOP) is a qualified retirement plan that invests in the business’s own stock and offers valuable tax benefits. The business’s contributions are typically tax-deductible. Dividends paid on ESOP stock passed through to employees or used to repay an ESOP loan, and dividends voluntarily reinvested by employees in company stock in the ESOP, may also be deductible. And shareholders might be able to sell stock to the ESOP and defer federal income taxes on any gains from the sale. Much depends on entity type. Contact us to learn more. READ MORE +

The IRA’s value as a retirement planning tool is well known. But if you don’t need an IRA to fund your retirement, you can use it as an estate planning tool to benefit your children or other beneficiaries on a tax-advantaged basis by turning it into a “stretch” IRA. It’s simply a matter of designating a beneficiary who’s significantly younger than you. This could be, for example, your spouse (if there’s a substantial age difference between the two of you), a child or a grandchild. You can also name a trust as beneficiary. Contact us for details. READ MORE +

For business owners, an excess of cash may sound like a nice problem to have. But companies that hoard money often do themselves more harm than good. Bank accounts usually generate returns that are much below the interest rates businesses pay on their debts, such as mortgages and credit lines, making carrying cash costly. There are many ways to reinvest a cash surplus to earn a higher return. For instance, you could repay those debts, invest in marketable securities, or even acquire a competitor (or its assets). We can help you identify your optimal cash balance. READ MORE +

People don’t give to causes. They give to those asking on behalf of a cause. That’s why a personal appeal to family and friends continues to be such a powerful not-for-profit fundraising tool, particularly for board members with extensive address books. When approaching potential donors, board members should humanize their appeal, relating how their own experiences have drawn them to the cause. They also should emphasize benefits such as public recognition and networking opportunities. Contact us for more ideas on using personal appeals to raise funds. READ MORE +

If you work for a corporation, you might receive nonqualified stock options (NQSOs). If the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for. NQSOs create compensation income taxed at ordinary-income rates on the “bargain element” (the difference between the stock’s fair market value and the exercise price) when exercised, regardless of whether the stock is held or immediately sold. You may need to make estimated tax payments or increase withholding to cover the tax. Have questions about NQSOs? Contact us. READ MORE +

EBITDA (earnings before interest, taxes, depreciation and amortization) gained popularity as a leveraged buyout tool in the 1980s. Today, it’s one of the most quoted performance metrics in the “management discussion and analysis” section of public companies’ financials. But EBITDA can be misleading, because 1) the term isn’t defined by formal guidance, and 2) it fails to consider changes in working capital, income taxes, principal repayments and capital expenditures. Never rely on EBITDA alone: Consult with us to perform a comprehensive financial analysis. READ MORE +

It’s unclear whether tax reform will be passed this year, so let’s look at three midyear business tax strategies inspired by the last major tax law, the PATH Act of 2015: 1) Buy equipment. The PATH Act preserved generous limits for the Section 179 expensing election and the availability of bonus depreciation. 2) Ramp up research. After years of uncertainty, the PATH Act made the research credit permanent. 3) Hire workers from “target groups.” The PATH Act extended the Work Opportunity credit for such hires through 2019. Contact us for details on these breaks. READ MORE +

If in your estate planning you’d like to provide for a loved one with a significant disability, consider an ABLE account. You can make nondeductible annual cash contributions to a qualified beneficiary’s ABLE account up to the federal gift tax annual exclusion amount (currently, $14,000). To qualify, a beneficiary must have become blind or disabled before age 26. The account grows tax-free, and withdrawals of earnings are tax-free if used to pay “qualified disability expenses.” Among other things, these include health care, education, housing and transportation. READ MORE +

What could shut down your company? A fire or flood? Maybe a hacker’s attack? Every business needs a disaster recovery plan that targets specific threats to its operations. Describe your risks in detail and create safeguards against them, such as identifying alternative suppliers and engaging an emergency IT service. Also, appoint and train an employee to speak on your company’s behalf and facilitate postcrisis communication. Review the plan at least annually and keep it fresh in employees’ minds. We can help identify cost-effective ways to safeguard your company. READ MORE +

Although dividends, interest, rents, annuities and other investment income generally are excluded when calculating a not-for-profit’s unrelated business income tax (UBIT), there are two exceptions. The first is when your nonprofit incurs debt to acquire an income-producing asset. The portion of the income or gain that’s debt-financed is generally subject to UBIT. The second is when income is received from a for-profit subsidiary or controlled nonprofit. To learn the details and ensure your nonprofit is complying with the IRS’s UBIT rules, contact us. READ MORE +

Intellectual property (IP) is often considered a critical strategic component of growing a business. While intangible, IP rights can be one of the most important assets your business owns. Understanding the legal and tax implications of IP business transactions can be daunting; and many experts consider that an understatement. READ MORE +

Own a vacation home? Adjusting rental vs. personal use might save taxes. If you rent out the home for less than 15 days, you don’t have to report the income, but rental expenses aren’t deductible. If you rent it out for 15 days or more, you must report the income, and deductibility of expenses depends on how the home is classified for tax purposes, based on personal vs. rental use. Adjusting the number of days you rent it out and/or use it personally between now and year end might allow the home to be classified in a more beneficial way. Contact us to learn more. READ MORE +

The IRS has eased portability election rules. Portability allows a surviving spouse to use the deceased spouse’s unused estate tax exemption (currently $5.49 million). Previously, if a deceased spouse’s estate failed to make a timely portability election, the only recourse was to request a private letter ruling. Rev. Proc. 2017-34 grants an automatic extension for taxpayers not otherwise required to file an estate tax return, provided they file a return making the election on or before the later of the second anniversary of the deceased’s death or January 2, 2018. READ MORE +

If you start planning now, you may avoid a tax surprise next April. For example, if you experience a life change (e.g., marriage or birth of a child), you may need to adjust your tax withholding by filing a new Form W-4 with your employer. Summer is also a good time to organize your tax records. Put your 2016 return and supporting records together in a safe but accessible place, such as a home safe or bank safe deposit box. And make tax time easier next year by putting records you’ll need (donation and out-of-pocket medical expense receipts, etc.) in one place. READ MORE +

Not-for-profits ignore the IRS’s private benefit and private inurement provisions at their own peril. The rules prohibit individuals inside or outside a nonprofit from reaping an excess benefit from its transactions. Violations can have devastating consequences, including loss of exempt status. And individuals involved may be subject to significant excise tax penalties. To protect your organization, document all transactions to insiders so you can later prove they were reasonable and made for an exempt purpose. Questions? Contact us. READ MORE +

As a company evolves, so must its compensation strategy. Business growth, economic changes or the rise of a tough competitor can all spur the need. Consider the going market rates for your positions, using available data and even a consultant’s input. Then group together similarly valued jobs to establish a competitive salary range consisting of a minimum, maximum and midpoint. The midpoint is particularly important because it’s your guideline for slotting positions into the right ranges. For help specific to your company’s needs, please contact us. READ MORE +

Independence is a critical part of an auditor’s ethical requirements. When assessing auditor independence, we consider whether an assignment 1) creates a mutual or conflicting interest, 2) puts the auditor in a position of auditing his or her own work, 3) results in the auditor acting as a member of management or an employee of its audit client, or 4) positions the auditor as an advocate of a client. If any of these conditions are met, auditor independence may be compromised. We can help public and private companies address auditor independence issues. READ MORE +

Many businesses operate as C corporations so they can buy and hold real estate just as they do equipment, inventory and other assets. But this can be a costly mistake: If the real estate is sold, any profit is subject to double taxation, first at the corporate level and then at the owner’s individual level on distributions. If real estate is held instead in a pass-through entity, such as a limited liability company (LLC), and then leased to the corporation, profit on a sale of the property is taxed only once, at the individual level. Contact us for details. READ MORE +

Risks associated with not-for-profit special events run the gamut from accidents and personal injury, to fraud and theft, to cancellation due to inclement weather or nonappearance by a featured performer. It’s possible to buy designated “special events insurance,” but such policies can be expensive. Instead, you may want to find out whether you can extend (for a one-time additional premium) a current insurance policy, such as general liability, D&O or fidelity, to cover your event. Contact us for more information on managing risk. READ MORE +

Years ago, all a business owner needed was a big, leather-bound ledger on the desk. These days, regularly upgraded accounting software is a must. Why? As a system ages, bad data can build up and adversely affect financial reporting. Ever heard the term “garbage in, garbage out”? It’s true. In addition, by regularly upgrading your accounting software, you may be able to identify better ways to manage expenses and handle internal controls. Let our firm help you set a budget for regular upgrades and choose the products that best suit your company’s needs. READ MORE +

President Trump has proposed a 15% federal income tax rate on business income — whether it’s earned by a traditional C corporation or by a pass-through entity such as an S corporation, limited liability company (LLC), partnership or sole proprietorship. If the 15% rate becomes law, what new tax planning opportunities might be opened up? And what limitations might Congress impose on that ultra-low 15% rate to prevent too much tax revenue leakage? READ MORE +

Here are three lesser-known income tax breaks for charitable donations by businesses: 1) deduction for donated food that equals the lesser of the food’s basis plus one-half the fair market value in excess of basis or two times the basis, 2) deduction for qualified conservation contributions by qualified C corporation farming and ranching operations of up to 100% of adjusted taxable income, and 3) favorable tax basis rule for shareholders of S corporations that make donations of appreciated property. Think you may be eligible? Contact us to learn more. READ MORE +

Planning your estate around specific assets can be risky. If you leave specific assets (such as a home, a car or stock) to specific people but dispose of an asset without updating your will, you might inadvertently disinherit someone. Therefore, it’s generally preferable to divide your estate based on dollar values or percentages. If it’s important to you that specific assets go to specific heirs, consider creating a trust that provides for your assets to be divided equally but for your heirs to receive specific assets at fair market value as part of their shares. READ MORE +

Cash flow fluctuations are intense for seasonal businesses. If your company defines itself as such, try to optimize your operating cycle. Look carefully at the beginning, middle and end of your cycle, identifying your strategic selling window. Try to stockpile cash received at cycle’s end, and then use those reserves to finance the next cycle. If you need a line of credit, compile a comprehensive loan package. Above all, draft a formal business plan, use financial projections and set budgets. Contact us for help with your distinctive challenges. READ MORE +

Regularly supplying the right kind of information to your not-for-profit’s board of directors is the key to the board properly fulfilling its duties. You don’t want to deluge them with so much that they can’t keep up, but three types of information are important to share: 1) Financial, including your Form 990, audit results, and monthly and quarterly financial reports; 2) Strategic, such as program usage and membership statistics; and 3) Board member, including member bios and thank-yous for special efforts. Contact us to learn more about nonprofit governance. READ MORE +

Are income taxes taking a bite out of your trusts? For trusts, the income threshold is very low for triggering the top income tax rate of 39.6%, top long-term capital gains rate of 20% and the 3.8% net investment income tax. The threshold is only $12,500 in 2017. But you can soften the blow by using an intentionally defective grantor trust, shifting nongrantor trust assets into tax-exempt or tax-deferred investments, or distributing trust income to beneficiaries in lower tax brackets. We can review your trusts and help find the best solution to achieve your goals. READ MORE +

Here are a few key tax-related deadlines for businesses and other employers during Quarter 3 of 2017. JULY 31: Report income tax withholding and FICA taxes for Q2 2017 (unless eligible for exception). File a 2016 calendar-year retirement plan report or request an extension. SEPT. 15: If calendar-year partnership or S corp. that filed an extension, file a 2016 income tax return. If calendar-year C corp., pay third installment of 2017 estimated income taxes. Contact us for more about the filing requirements and to ensure you’re meeting all applicable deadlines. READ MORE +

Ever wonder how your company’s historical financial statements might differ if you’d taken an alternate course of action? For example, how much would earnings have increased (or decreased) if you’d merged with another business or discontinued a product line? New guidance went into effect on May 1, 2017, that clarifies what a pro forma compilation is and what’s expected from clients who hire CPAs to perform these nontraditional engagements. We understand the new guidance and have updated our practices. Contact us for help compiling your pro formas. READ MORE +

A charitable lead trust (CLT) is most effective in a low-interest-rate environment, so conditions for taking advantage of a CLT now are favorable. A CLT provides a regular income stream to charities during the trust term, after which the remaining assets pass to noncharitable beneficiaries. A charitable lead annuity trust (CLAT) makes annual payments to charity equal to a fixed dollar amount or a fixed percentage of the trust assets’ initial value. Typically, people establish CLATs during their lives because it allows them to lock in a favorable interest rate. READ MORE +

Insurance is a risk management imperative for businesses. But owners don’t have to take high coverage costs sitting down. Stay on top of facilities maintenance and constantly strive to improve worker safety. For example, have an electrician ensure circuits aren’t close to overloading, and regularly test all fire prevention systems. Check high-traffic areas for slip-and-fall risks and eliminate clutter. You might even want to request an OSHA courtesy inspection. We can assess your insurance costs and help you identify opportunities for savings. READ MORE +

Traditionally, government agencies pay not-for-profit social service providers for specific activities or delivery models. But what if your nonprofit lacks the upfront money to pursue required outcomes? That’s where outside investors may come in. They supply capital and operating funds by investing in social impact bonds issued by your nonprofit or an intermediary. In exchange, they receive a share of government payments made for successful outcomes. Your nonprofit might benefit if it has measurable outcomes highly correlated with social net benefits. READ MORE +

If you don’t pay attention to the details, the tax consequences of selling an investment may be different from what you expect. For example, if you bought the same security at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to identify which block of shares is being sold. At year end, keep in mind that the trade date, not the settlement date, of publicly traded securities determines the year you recognize the gain or loss. Questions about tax planning for investments? Contact us! READ MORE +

Treating transfers of money between a closely held business and its owners as loans can provide tax advantages. But the IRS looks closely at such transactions, so it’s critical to establish that the transaction is truly a loan by 1) executing a promissory note, 2) charging a reasonable rate of interest, 3) establishing and following a fixed repayment schedule, 4) securing the loan using appropriate collateral, 5) treating the transaction as a loan in the company’s books, and 6) making reasonable efforts to collect in case of default. Contact us for more details. READ MORE +

If you procrastinate closing your books and delivering year-end financial statements, lenders and investors may think the worst. Late financials give the impression that 1) you’re hiding weak performance, 2) management is inept or doesn’t care about financial reporting, or 3) you’re more likely to be a victim of fraud. Timely financial statements are a must for fostering goodwill with outside stakeholders. We can help you stay focused, work through complex reporting issues and communicate weaker-than-expected financial results in a positive, professional manner. READ MORE +

Some people make video recordings of their will signings in an effort to create evidence that they possess the requisite testamentary capacity. For some, this strategy may help stave off a will contest. However, unless the person signing the will delivers a flawless performance, a challenger will pounce on the slightest hesitation as “proof” that the person lacked testamentary capacity. An alternative strategy is to have a doctor examine you and attest to your capacity immediately before the signing. Contact us for other estate planning strategies. READ MORE +

Debt is an integral part of many for-profit companies’ strategic plans, yet it has traditionally carried a stigma in the not-for-profit world. That view is changing, as more organizations borrow money for major capital purchases, new program funding and other reasons. But before your nonprofit borrows, know that it takes prudent financial management and reliable donor support to pay back a loan. You also need to make the case to a lender that you have a compelling reason to borrow and a realistic repayment plan. Contact us for more information. READ MORE +

Transitioning your company to a successor means becoming a mentor. As such, you’ll have to communicate clearly, be patient and know what you’re trying to accomplish. For starters, identify various ways to pass along your knowledge. Consider, for instance, a formal training program. Have your successor work in each business department or area. Also, encourage him or her to join trade associations and network with executives in your industry and others. Please contact our firm for more help maximizing the effectiveness of your succession plan. READ MORE +

Reimbursing employee travel expenses can provide tax benefits to both your business and the employee. Your business can deduct the reimbursements (subject to a 50% limit for meals and entertainment), and they’re excluded from the employee’s taxable income. But the expenses must be legitimate and the reimbursements must comply with IRS rules, generally by using either the per diem method or an accountable plan. Whether you have questions about which reimbursement option is right for your business or the additional rules and limits that apply to each, contact us. READ MORE +

A primary goal of estate planning is asset protection. If you have significant assets in IRAs and other retirement plans, it’s important to understand the extent to which those assets are protected against creditors’ claims. For example, the asset protection available for IRAs depends in part on whether the owner is involved in bankruptcy proceedings. In a bankruptcy context, creditor protection is governed by federal law: Both traditional and Roth IRAs are exempt from creditors’ claims up to an inflation-adjusted $1 million. Contact us for additional details. READ MORE +

Every not-for-profit organization needs a comprehensive succession plan to ensure smooth leadership transitions. The plan should be in writing and cover such issues as developing employees to move up the ladder and eventually assume leadership positions. It’s also important to describe how you’ll leverage organizational knowledge and keep your nonprofit running smoothly during transition periods. Further, detail how your board can conduct or assist in the executive search process and support a new hire. Contact us for more information and help creating a plan. READ MORE +

Intrafamily loans can provide your family financial assistance without triggering unwanted gift taxes, as long as they’re properly structured. A family bank is a family-owned, family-funded entity designed for the sole purpose of making intrafamily loans. By “professionalizing” family lending activities, a family bank can preserve the tax-saving power of intrafamily loans while minimizing negative consequences. Avoid family resentment by building a strong governance structure that promotes transparency. Contact us to learn more about intrafamily lending. READ MORE +

Every company has at least one owner, but not every company has strong governance. This is the set of rules and practices by which a business is directed and controlled. Strengthening it can help ensure productivity, reduce legal risks and ease ownership transitions. Begin by looking at your business structure. Corporations must take certain actions, but other entities can voluntarily take governance steps such as defining executive authority and formalizing compensation agreements. Please contact our firm for help with your company’s specific governance needs. READ MORE +

Many not-for-profit youth sports leagues are at risk for fraud and don’t even know it. But you can protect your league by taking a few simple steps. The most important is to segregate duties. This means that no single individual receives, records and deposits funds coming in, pays bills and reconciles bank statements. Every payment (or at least those over a certain threshold) should require two signatures. And if your league has credit or debit cards, ask someone who isn’t an authorized user to review the statements. Contact us for more fraud prevention tips. READ MORE +

Could you benefit from opening the “back door” to a Roth IRA? Roth IRAs allow tax-free distributions; the tradeoff is that contributions aren’t deductible. But income-based phaseouts may reduce or eliminate your ability to contribute. If so and you don’t already have a traditional IRA, a “back door” Roth IRA might be for you: You set up a traditional IRA, make nondeductible contributions to it and convert it to a Roth. The only tax due will be on any growth in the account between the time you made the contribution and the conversion date. Contact us for details. READ MORE +

As a business owner, you likely are concerned about being audited by the IRS. Audits can occur randomly, but some tax return items may raise red flags with the IRS, such as major inconsistencies between previous years’ filings and the most current one, profit margins or expenses markedly different from those of similar businesses, and unusually high deductions. If the IRS selects you for an audit, we can help you understand what the IRS is disputing, gather the needed documents and information, and respond to the auditor’s inquiries expediently and effectively. READ MORE +

Cooper Union is a NYC-based private college that was founded in 1859 with a mission to be “open and free to all.” For over 150 years the school relied on its significant endowment to provide a tuition-free education to its students. READ MORE +

Income and losses from investment real estate or rental property are passive by definition, unless you’re a real estate professional. Why does this matter? Passive income may be subject to the 3.8% net investment income tax, and passive losses generally are deductible only against passive income, with the excess carried forward. To qualify as a pro, you must annually perform: 1) more than 50% of your personal services in real property trades or businesses in which you materially participate, and 2) more than 750 hours in these businesses. Contact us for details. READ MORE +

Own a business? Have children who are teens, college students or new grads? If you hire them this summer, not only can they benefit but you can enjoy tax savings, too. By shifting some business income to a child as wages for services performed by him or her, you can turn high-taxed income into tax-free or low-taxed income. For your business to deduct the wages, the work done must be legitimate and the wages must be reasonable. Depending on your business’s structure, you might enjoy employment tax savings, too. Additional rules apply; contact us for details. READ MORE +

The typical funeral now costs $8,000 to $10,000. To relieve their families of the burden of planning a funeral, many people plan their own and pay for them in advance. Unfortunately, prepaid funeral plans are fraught with potential traps. Before you agree to a prepaid plan, the Federal Trade Commission recommends asking what happens to the money you’ve prepaid, what happens to the interest income on prepayments placed in a trust account and whether you’re protected if the funeral provider goes out of business. Contact us for other ideas on funding funeral costs. READ MORE +

Want to help your child (or grandchild) buy a home? Don’t wait! Mortgage interest rates are still quite low, but they likely will increase as the Fed continues to raise rates. If the child is eligible for the 0% long-term capital gains rate, here’s a tax-smart strategy: Instead of giving cash to help fund a down payment, give long-term appreciated assets such as stock or mutual fund shares. The child can sell the assets tax-free, and you can save the taxes you’d owe if you sold the assets yourself. Contact us for other tax-smart ways to help a child buy a home. READ MORE +

Lawmakers’ and public interest in not-for-profits’ governance has grown in recent years. If your board hasn’t reviewed its fiduciary duties recently, it should do so. In general, a fiduciary has three primary duties: 1) care (to oversee financial and operational activities with care), 2) loyalty (to act in the nonprofit’s best interests) and 3) obedience (to adhere to the nonprofit’s bylaws and rules and all applicable laws). Board members who violate these duties may be held personally liable for financial harm suffered by your nonprofit. Contact us for details. READ MORE +

Picking someone to lead your company after you is a daunting task. Keep an open mind and assume nothing. For example, a family member may seem the obvious choice. But he or she must really want the job and be qualified. Maybe a current employee is the better choice, but start grooming him or her early and monitor readiness carefully. Alternatively, you might need to find an external candidate. To do so, consider networking, targeted ads and even an executive search firm. Overwhelmed? Don’t be; we can help you create an effective succession plan. READ MORE +

If running a business is like going on a road trip, then a full set of pro forma financials is your road map or GPS app. Projected balance sheets, income statements and cash flow statements tell investors and lenders 1) where you are, 2) where you want to go, 3) when you’re likely to experience cash flow or capacity shortages, and 4) when you hope to arrive. Moreover, the statement of assumptions explains how you’ll achieve your goals. We can help you prepare pro forma financials, compare expected to actual results and adjust your assumptions as needed. READ MORE +

If you’re making noncash gifts in trust or outright to beneficiaries, know the values of those gifts and disclose them to the IRS on a gift tax return. For substantial gifts of noncash assets other than marketable securities, have a qualified appraiser value the gifts at the time of the transfer. This is critical because, if the IRS deems your valuation to be “insufficient,” it can revalue the property and assess additional taxes. If the IRS finds that the property’s value was “substantially” or “grossly” misstated, it will also assess additional penalties. READ MORE +

Is your not-for-profit association offering enough (or the right) programs to keep members active and engaged? New programs require time, effort and money, so when you commit to developing one you want to get the biggest bang for your buck. Start by gathering information through focus groups, surveys and informal conversations about issues your membership is facing. Note gaps between your current program offerings and members’ wants and needs. Don’t spin member feedback to match what you think your organization needs. Contact us for more tips. READ MORE +

If employees don’t value their benefits, they might not fully use them. And, for the employer, this could mean wasted dollars spent on a strong but unappreciated benefits package, plus the possible loss of good employees who depart for “better” benefits. To boost perceived value, create a year-round communication program to promote your benefits package. Consider targeting various life stages to better appeal to employees. And gather feedback to determine employees’ informational needs. Contact our firm for more tips on maximizing the value of your benefits. READ MORE +

Do you know what individual income tax records are safe to toss? You need to hold on to your 2016 records for now, but it’s a great time to see what records for previous tax years you can purge. At minimum, keep records for as long as the IRS can audit your return or assess additional taxes, generally three years after filing. So you may be able to shred and toss (or electronically purge) most records related to returns for 2013 and earlier. But hang on to certain records longer, such as tax returns themselves, W-2 forms and real estate or investment records. READ MORE +

Will your C corp.’s buy-sell agreement produce adverse tax consequences? In a redemption (the company buys back a departing owner’s shares), share value may rise without boosting owners’ basis, increasing tax if shares are later sold. In a cross-purchase (owners buy back the shares), basis increases. But if owners are required to buy back shares and the company buys them instead, it may be a taxable dividend. A hybrid agreement naming the company as a party to the transaction and allowing but not requiring owners to buy back shares may be the answer. We can help. READ MORE +

Tax efficiently mixing life insurance into your estate plan can be challenging. If you own an insurance policy on your life, you can remove the proceeds from your taxable estate by transferring it to a family member or an irrevocable life insurance trust. But if you don’t survive for at least three years, the proceeds will be pulled back into your estate, possibly triggering estate taxes. The recipe for success? Transfer the policy as part of a “bona fide sale for adequate consideration” to an irrevocable grantor trust. Contact us to learn more.
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Here are a few key tax-related deadlines for individuals through the rest of 2017. JUNE 15: Pay second installment of 2017 estimated taxes, if applicable. SEPT. 15: Pay third installment of 2017 estimated taxes, if applicable. OCT. 16: File a 2016 income tax return and pay any tax, interest and penalties due, if an automatic six-month extension was filed. DEC. 31: Incur various expenses that potentially can be deducted on your 2017 tax return. Contact us for more information about the filing requirements and to ensure you’re meeting all applicable deadlines. READ MORE +

There is a government sponsored program that helps investors do well by doing good; that is earn tax credits for investing in low-income communities across America. But this opportunity comes with a catch: the need to navigate a complex series of tax filing, compliance and investment qualification requirements. The New Markets Tax Credit Program's goal is to spark revitalization of low-income and overwise impoverished areas in the United States. READ MORE +

No business should rely on luck to avoid a cyberattack. One area to consider is your employees. You might assume that only an outsider would, say, steal sensitive data or disable your website. But these crimes are often inadvertently caused or intentionally committed by employees. Train managers to review job applications with cybersecurity in mind. Also, clearly state your cybersecurity policies in your employment handbook, so all employees know your guard is up. Although most workers are honest, all it takes is one mistake or bad apple to cause a disaster. READ MORE +

To err is human, but your not-for-profit’s supporters, not to mention the IRS, may be less than forgiving about financial and bookkeeping mistakes. So attend to accounting details to avoid pitfalls. For example, don’t operate without proper accounting procedures that cover all aspects of managing your organization’s money, from how to accept, document and deposit donations to how to pay bills. And don’t work without a budget. You can’t control overspending or invest a surplus if you don’t know they exist. For more tips on avoiding accounting mistakes, contact us READ MORE +

The 2016 tax return filing deadline for individuals is April 18, and the IRS considers a paper return to be timely filed if postmarked by midnight. If you owe tax, dropping your return, along with a check for the tax due, in a mailbox on the 18th may not be sufficient. If the envelope gets lost, you could be hit with failure-to-file and failure-to-pay penalties. To avoid this risk, use certified or registered mail or one of the private delivery services designated by the IRS. (See IRS.gov for a list.) Let us know if you have questions about the rules. READ MORE +

What are the most tax-advantaged ways to reimburse employees’ education expenses? One option is the working condition fringe benefit. It allows you to exclude reimbursements of job-related education costs from employees’ wages. This means employees don’t have to pay tax on them and you don’t have to withhold income tax or withhold or pay payroll taxes on them. Another option is an educational assistance program, which allows the same tax treatment but can also cover reimbursements for non-job-related education up to $5,250 annually. Contact us to learn more. READ MORE +

How do you rate your internal controls? A strong system of internal controls will help a company achieve its strategic and financial goals, in addition to minimizing the risk of fraud. Auditors routinely monitor the three basic control features: 1) physical restrictions, 2) account reconciliation, and 3) job descriptions. Company insiders sometimes lack the experience or objectivity to assess internal controls. But our auditors have seen the best (and worst) internal control systems and can help evaluate whether yours is effective. READ MORE +

Owning assets jointly with children or other heirs is a common estate planning “shortcut.” There are two potential advantages to joint ownership: convenience and probate avoidance. But, it can also create a number of problems, such as unnecessary taxes. Adding a child’s name to the title may be considered an immediate taxable gift of one-half of the property’s value. And when you die, the property’s value then will be included in your taxable estate, though any gift tax paid with the original transfer would be allowed as an offset. Contact us for other drawbacks. READ MORE +

Home ownership comes with many tax-saving opportunities to consider when filing your 2016 return or tax planning for 2017, such as property tax, mortgage interest, home-equity-debt interest and home office deductions and rental income and home-sale gain exclusions. A mortgage-insurance premium deduction and debt forgiveness exclusion expired December 31, 2016. Elimination of more breaks, such as the property tax deduction, has been proposed. Whether such changes will be signed into law and with what effective dates is uncertain. Contact us for more information. READ MORE +

Now that the Affordable Care Act (ACA) repeal and replace bill has been withdrawn, it’s a good time to review a few tax-related ACA provisions affecting businesses: 1) Qualifying small employers can claim a credit for a portion of health insurance premiums. 2) Applicable large employers not offering full-time employees health coverage that meets certain standards risk penalties. 3) Employers must withhold an additional 0.9% Medicare tax once an employee’s pay for the year exceeds $200,000. Have questions about the ACA’s tax impact on your business? Contact us! READ MORE +

Many people consider a position on a nonprofit board a recognition of their financial contributions and other efforts to support the organization. But it goes well beyond that. One of the main fiduciary responsibilities of a board member is helping oversee the financial health and accountability of their organization. READ MORE +

What are the three financial statements under U.S. GAAP, and what’s included in each? If you can’t immediately answer these questions, you’re not alone. Many business owners are so focused on building revenue that they don’t have time to regularly monitor the 1) income statement, 2) balance sheet and 3) cash flow statement. But doing so can provide insight into trends that may help you catch potential problems early, and pivot, when needed, to maximize the company’s value. Contact us for a refresher on financial reporting and how to benchmark performance. READ MORE +

If your estate plan includes charitable donations, be sure to discuss any planned gifts with the intended recipients. Some charities have policies of rejecting gifts that come with strings attached; they accept only unrestricted gifts. Others may not accept certain types of assets, such as real estate. If a charity rejects your gift, the property will go to any contingent beneficiaries. If these beneficiaries aren’t other charities, rejection of the gift may create estate tax liability. Contact us to learn about additional pitfalls when making gifts to charity. READ MORE +

For many companies, the sudden death of an owner or hard-to-replace employee could spell doom for the business itself. Key person insurance guards against this risk. Your business pays the premiums and, if the insured dies while the policy is in effect, receives the payout. Premiums generally aren’t tax deductible, but death benefits typically aren’t considered taxable income when received. Not every type of business needs this insurance, but it can provide security while you develop a succession plan. We can help you decide whether a key person policy is for you. READ MORE +

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2016 federal income tax return. A casualty is a sudden, unexpected or unusual event, such as a natural disaster, fire, accident, theft or vandalism. The loss is generally the lesser of the amount you paid for the property or the decrease in the property’s fair market value. This amount must be reduced by any insurance or other reimbursement received or anticipated. Additional rules and limits apply. Contact us for more information.
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Grandparents often want to help finance their grandchildren’s education. A simple technique is to make tuition payments on behalf of your grandchild. So long as you make the payments directly to the educational institution, they avoid gift and generation-skipping transfer (GST) taxes without using up any of your $5.49 million gift or GST tax exemption or $14,000 annual exclusion. Even if these taxes are repealed, as long as education funding is your goal, this strategy likely won’t have any negative impact. Contact us to learn about all of your funding options. READ MORE +

Can your company’s retirement plan participants take out loans from their accounts? If so, you must set a “reasonable” interest rate. Neither the IRS nor the DOL provides a set percentage for plan sponsors. The IRS looks to similar local interest rates and what local banks charge for similarly structured loans. Meanwhile, DOL regulations generally define a reasonable rate as equal to commercial lending interest rates under similar circumstances. Need help? We can assist you in reviewing your plan document and loan policy statement to calculate a reasonable rate. READ MORE +

When your nonprofit’s employees submit expenses for reimbursement, you generally must report the payments on W-2 forms, withhold applicable taxes and pay the employer portion of employment taxes. But with an accountable plan in place, you can avoid these steps and save both staffers and your organization taxes. Expenses covered in an accountable plan must have a business connection, be “reasonable” and be properly documented. Additional rules apply, and your plan should be put in writing in case the IRS ever challenges it. We can help you do this. READ MORE +

Who can take the American Opportunity credit? If you have a child in college, you may be eligible to claim the credit (up to $2,500) on your 2016 income tax return. If your income is too high, you won’t qualify. But your child might. There’s a potential downside: You’ll have to forgo your dependency exemption for him or her. And the child can’t take the exemption. But the exemption is also subject to a phaseout, so you might lose its benefit anyway. We can help run the numbers and provide more information about qualifying for the American Opportunity credit. READ MORE +

If you run a business “on the side” and derive most of your income from another source, you may face a risk: Your enterprise might be a hobby in the eyes of the IRS. If so, it will be subject to the hobby loss rules, which means you can’t use a loss from the activity to offset other income. In evaluating whether an activity is a hobby, the IRS looks at various factors. For example, poor record keeping, ongoing lack of profit and minimal effort to make a profit might indicate a hobby. Concerned about the hobby loss rules? We can help evaluate your situation. READ MORE +

Company retreats can be expensive. But when planned properly, they can produce fresh strategic ideas and raise employee morale. To ensure the event’s success, several months ahead of time identify your key retreat objectives. Pick only two or three so you have a better chance of fulfilling these goals. Also, create a detailed, reasonable budget. Set limits for such variable costs as location, accommodations, food, transportation, speakers and entertainment. It’s not easy, but a retreat can be both enjoyable and cost-effective. Please let us know how we can help. READ MORE +

Going through a divorce? Update your estate plan as soon as possible to avoid unintended outcomes. Unless you wish to provide your former spouse with an inheritance, immediately amend your will and trusts to eliminate him or her as a beneficiary. Also, unless you’re comfortable with your former spouse controlling your wealth, designate someone else as executor or trustee. This is a good idea even if you live in a state where divorce automatically nullifies bequests to an ex-spouse and automatically revokes an appointment of a former spouse as executor or trustee. READ MORE +

All organizations, not-for-profit and for-profit alike, need a continuity plan for when disaster strikes. But these plans are particularly critical for organizations that provide essential human and emergency services. Start by assessing threats to your people, processes and technology. Then consider best and worst outcomes regarding personal injury, property damage and financial losses and how you can mitigate any damage. Although everyone should provide feedback, assign one person to take the lead and create the plan document. For additional tips, contact us. READ MORE +

There’s still time to make 2016 IRA contributions: The deadline is April 18. If the contribution is deductible, it will lower your 2016 tax bill. But even if it isn’t, a 2016 contribution is likely a good idea. Your money can grow tax-deferred (tax-free in Roth accounts). But annual contributions are limited by law, and any unused limit can’t be carried forward; once the deadline has passed, the savings opportunity is lost forever. The 2016 limit is $5,500 (plus $1,000 for those age 50 or older on Dec. 31, 2016). Want to learn more? Contact us. READ MORE +

Like many business owners, you might also own highly appreciated business real estate. Under a Sec. 1031 “like-kind” exchange, you can defer gains on real property used in a business if, instead of selling it, you exchange it solely for property of a “like kind.” Virtually any type of real estate will qualify as long as it’s business or investment property. It’s rare for two owners to simply swap properties. You’ll likely have to execute a “deferred” exchange, in which you engage a qualified intermediary. The rules are complex, so contact us for details. READ MORE +

Probate is a legal procedure in which a court establishes your will’s validity, determines your estate’s value, resolves creditors’ claims, provides for the payment of taxes and transfers assets to your heirs. Downsides to probate are that it’s time consuming, expensive and public. You can avoid or minimize probate by designating beneficiaries where possible and titling assets in a way that allows them to be transferred directly to your beneficiaries outside your will. Contact us to learn more ways to minimize probate based on your assets. READ MORE +

If your not-for-profit solicits funds online, or uses other fundraising methods that cross state boundaries, it may need to register in multiple jurisdictions. The critical activity is soliciting, not accepting, funds. So an unsolicited donation from an out-of-state supporter doesn’t necessarily require you to register in that state. However, widely used communications such as email and text blasts and social media appeals are likely to be considered multistate solicitations. Unfortunately, rules vary widely by state and can be confusing. Contact us for help. READ MORE +

Are you supporting an elderly parent? You might qualify for the adult-dependent exemption, which allows a deduction of up to $4,050 per adult dependent claimed on your 2016 tax return. For you to qualify, in most cases your parent must have less gross income for the tax year than the exemption amount. Generally Social Security is excluded, but payments from dividends, interest and retirement plans are included. And you must have contributed more than 50% of your parent’s financial support. Contact us for more information on qualifying for this break or others. READ MORE +

The March 15 federal income tax filing deadline for calendar-year partnerships, S corporations and LLCs treated as partnerships or S corporations for tax purposes is nearly upon us. This deadline is nothing new for S corporation returns, but it’s about a month earlier than previous years for partnership returns. The extension deadline remains at Sept. 15 for both partnership and S corporation returns, but you must file for the extension by March 15. Contact us if you have questions about the filing deadlines that apply to you or avoiding interest and penalties. READ MORE +

What’s the most costly type of white collar crime? Falsified or manipulated financial statements generate a median cost of $975,000 — more than any other type of occupational fraud, according to the Association of Certified Fraud Examiners. Examples include concealed liabilities, fictitious revenues, inflated asset valuations, misleading disclosures and timing differences. Losses from financial statement fraud can quickly snowball out of control. We can help identify red flags, ferret out ongoing schemes and deter would-be fraudsters from cooking your books. READ MORE +

Estate planning isn’t just about what happens to your assets after you die. It’s also about protecting yourself and your loved ones. This includes having a plan for making critical medical decisions in the event you’re unable to make them yourself. And, as with other aspects of your estate plan, the time to act is now, while you’re healthy. If an illness or injury renders you unconscious or otherwise incapacitated, it will be too late. READ MORE +

It’s a simple question. If my company buys a given asset, will the asset’s benefits be greater than its cost? Some basic ways of finding an answer ignore the time value of money. That’s why it’s better to look to discounted cash flow metrics. For example, net present value measures how much value a capital investment adds to the business. And internal rate of return estimates a single rate of return that summarizes the investment opportunity. We can help you use these and other metrics to make better business decisions. READ MORE +

Does your not-for-profit have too much work and not enough staff to go around? Consider outsourcing your human resources function. It could give your employees more time to spend on other core duties, mission-driven programs and strategic plans and help reduce costs. Even if after performing a cost-benefit analysis you find that it costs more to outsource, you may want to move forward because most HR providers will have better tools and more time to spend on employee issues than your organization does. But there are downsides, too. READ MORE +

As you file your 2016 income tax return and plan your charitable giving for 2017, it’s important to keep in mind the available deduction. It can vary significantly depending on a variety of factors. Other than the actual amount you donate, one of the biggest factors that can affect your deduction is what you give. READ MORE +

Rather than keeping track of the actual cost of operating a vehicle, employees and self-employed taxpayers can use a standard mileage rate to compute their deduction related to using a vehicle for business. But you might also be able to deduct miles driven for other purposes, including medical, moving and charitable purposes. READ MORE +

Employers that hire individuals who are members of a “target group” may be eligible for the Work Opportunity tax credit (WOTC). If you made qualifying hires in 2016 and obtained proper certification, you can claim the WOTC on your 2016 tax return. Whether or not you’re eligible for 2016, keep the WOTC in mind in your 2017 hiring, because the credit is also available for 2017. READ MORE +

If you’re concerned about your family’s financial well-being after you’re gone, life insurance can provide peace of mind. Going a step further and setting up an irrevocable life insurance trust (ILIT) to hold the policy offers additional estate planning benefits.Nevertheless, you can design the trust to adapt to changing circumstances and provide that children or grandchildren born after you establish the trust be automatically added as beneficiaries. READ MORE +

Most business owners spend a lifetime building their business. And when it comes to succession, they face the difficult decision of whether to sell, dissolve or transfer the business to family members (or a nonfamily successor). Many complicated issues are involved, including how to divvy up business interests, allocate value and tackle complex tax issues. READ MORE +

Bylaws are the rules and principles that define your not-for-profit’s governing structure. Your board and staff need to be familiar with exactly what the bylaws contain — and what they don’t. If they’re incomplete or don’t reflect the organization’s current mission, revising them is critical. READ MORE +

U.S. public companies are required to report their financial results using U.S. Generally Accepted Accounting Principles (GAAP). But, since 2007, hundreds of foreign companies listed on U.S. stock markets have been able to report financial results using International Financial Reporting Standards (IFRS) instead of GAAP. The Securities and Exchange Commission (SEC) is currently considering a proposal that, if approved, would allow domestic companies to supplement their GAAP results with IFRS results. READ MORE +

There is a growing phenomenon in business called “micro-multinationals” and a vexing international tax issue around “transfer pricing” that goes with them. The Marks Paneth global network is a multi-lingual and multi-disciplinary team of experienced professionals who can work with you to get started by designing an efficient transfer pricing model and pricing methodology that aligns with your business. READ MORE +

If your not-for-profit is “stuck” and unsure how to move forward, consider adopting some for-profit business practices. The essential missions of businesses and nonprofits may be different, but ways to achieve them often are the same. For example, the strategic plan lies at the core of most for-profit businesses and should be at the core of nonprofits, too. Your plan should set objectives for one, five and 10 years out, paying particular attention to each goal’s return on investment. To learn more about business practices that benefit nonprofits, contact us. READ MORE +

Many companies reach a point where they could benefit from an advisory board. If you’re about there, you may wonder what your ideal advisory board should look like. First, participants need to have expertise and experience that complement your company’s staff. Second, they should support your long-term strategic goals. Look to assemble a diverse mix of backgrounds, personalities and skills. As your business evolves, you may need to replace some members or change the board’s size. Please contact our firm to discuss the concept of advisory boards further. READ MORE +

A board retreat can give board members a break and your nonprofit a boost. Board members lead busy lives and may not get to every board meeting, so a retreat that brings everyone together in a relaxed setting can be invaluable. Retreats enable participants to get past the mundane topics of regular meetings and delve into specific issues. To get the most out of your retreat, choose the time and place carefully, create a detailed agenda and make a postretreat plan for following up on decisions made during the retreat. Contact us for help with nonprofit governance. READ MORE +

If you send all of your not-for-profit’s communications (donation requests, newsletters, meeting announcements) to everyone on your email list, don’t be surprised if stakeholders tune out or even unsubscribe. By getting the right messages to the right people, email segmentation can help increase engagement and response rates. Consider segmenting your list by donation amount, event participation, membership renewal, volunteer hours and even demographics, if you have that data. Contact us for more tips on improving your nonprofit’s efficiency and effectiveness. READ MORE +

Is your business truly committed to its cost-control regimen? Like keeping up an exercise routine, controlling expenses takes not just good intentions but also an ongoing effort. Begin by identifying expenses in every business area. Prime candidates include technology contracts, lease agreements, and utilities and office supplies. Managing such costs shouldn’t be a one-time thing. It must be a strategic decision that starts with ownership and is clearly communicated down the organizational chart. Contact our firm for help with your long-term cost-control plan. READ MORE +

Many businesses are taking a new approach to paid time off (PTO). Under the “PTO bank” concept, employers merge the traditional components of excused absences (vacation time, sick time, etc.) into one employee-managed account. Many of today’s employees and job candidates view PTO banks as easier and empowering. More efficient administration can reduce the associated costs for employers as well. But, despite the many potential benefits, creating PTO banks may not be the best move for every company. Please contact our firm for help assessing the idea. READ MORE +

While the FASB has postponed the effective date for the new principles-based, revenue guidance by one year, companies that report comparative results can’t delay any longer. Learn how to start the implementation process now. READ MORE +

Many businesses use independent contractors to keep payroll taxes and fringe benefit costs down. But using outside workers may result in other problems. The IRS often questions businesses about whether workers should be classified as employees or independent contractors for federal employment tax purposes. READ MORE +

Your nonprofit’s internal controls are strong only if they’re current. So perform a risk assessment every time you experience major organizational changes, such as significant expansion, or when factors such as the loss of a large grant put new stresses on your not-for-profit. Two functions deserve particular scrutiny. READ MORE +

The prospect of leaving your company in the hands of someone else likely brings mixed emotions. You’ve no doubt spent a substantial amount of time and a great degree of effort in getting your enterprise to where it is today. But when it comes to creating and executing a succession plan, decisive action is critical. You’ve got to respect the importance of timeliness — not only for you and your family, but also for your successor and employees. So here are two key questions to answer. READ MORE +

Business opportunities in the US marketplace have never been better for non-US based entrepreneurs and start-ups. The US economy continues to show strong growth and economic resilience, even in the face of volatile capital markets in early 2016. But both foreign individuals and start-ups need to be wary of the complex US tax landscape, as poor planning and even inadvertent behavior or actions can result in huge tax liabilities. READ MORE +

While many small business owners may consider offering a 401(k) plan, many decide against it based on uncertainty over costs, a cumbersome set-up process and the administrative burden that is required to run it. READ MORE +

Employee Stock Options are fast becoming a standard component of compensation for many emerging growth sector companies. Stock option plans are a very popular way of attracting and retaining high performing employees for startups, who often lack the cash to offer big salaries and bonuses. These plans give founders the ability to offer stock options to employees, officers, directors, consultants and advisors – in short all the people often needed to get a business up and running. It allows people to buy stock in the company when they exercise the options, and in some cases make loads of money in the process. READ MORE +

UK and European companies that do business in the US or set up US operations are frequently puzzled by US sales and use taxes. Sales and use taxes are transactions taxes that are imposed on ultimate customers at a state and local level. The amounts and rules vary from state to state and locality to locality. Sales and use taxes are not like European value added tax (VAT). VAT is a tax imposed on each level of a transactional chain but then recoverable in many circumstances except by the ultimate retail customer. READ MORE +

The New Jersey Economic Development Authority (NJEDA) is offering all investors who invest in a qualifying NJ emerging technology business a tax credit through the Angel Investor Tax Credit program. NJEDAThis program was enacted in January of 2013 to help attract investments, and spur job creation / economic growth in New Jersey’s current and next generation of high-skilled, high- paying emerging technology sector. READ MORE +

The IRS section 41 tax credit for research and development (R&D) is now permanent. With this change there are big potential benefits to start-ups and small business who could not previously take advantage of this credit. If you are a start-up company with annual gross receipts of less than $5 million, you can apply up to $250,000 of your R&D credit against your payroll tax liability. The modification of the R&D tax credit was part of the 2015 PATH (Protecting Americans from Tax Hikes) act and allows companies to free up cash flow to invest in their businesses. READ MORE +

In the excitement of raising money from investors then launching, a new start-up business ,many founders and stakeholders are focused on refining the product / service offering, acquiring customers, making sales and making the business profitable. But founders should be both mindful and vigilant about meeting all their tax liabilities. Not doing so could result in extremely unpleasant consequences, including stiff fines from federal, state and local tax authorities. Here’s an overview of the business owner’s role / responsibility, and a list of tax-related issues that should be considered by savvy founders, ideally with the help of a qualified CPA. READ MORE +

When UK emerging companies venture outside the UK, they quickly need to address whether – and how – to extend equity-based compensation to non-UK employees. However, few jurisdictions offer a regime as favourable as the UK’s Enterprise Management Incentives (EMI) scheme for providing equity compensation to emerging company employees. READ MORE +

For many individuals, entrepreneurs and companies it’s about achieving and living the ‘American dream’. Being successful in the US is well on the way to being successful globally. To what extent is this true, and how easy is it to ‘crack’ America? READ MORE +

There is an abundance of digital media coverage, and discussions at leading venture funding events about the huge opportunities for investors and founders alike to win big financially – by creating and scaling innovative start-ups. READ MORE +

You are a non-US based firm and you’ve taken the plunge by deciding to set up your business in the US. Now you are designing your business model and your budget for the next few years. High on your “to do” list is estimating sales revenue, marketing, wages and office space and other expenses so that you can determine the potential profitability or loss of your business globally. The difficult task is then to determine how much of this profit or loss is taxed in each country where you are operating. READ MORE +

Start-ups coming to the US from abroad, even if just to “test the waters” of doing business in the US, need to be wary of the complex US tax landscape – on a Federal and State level. Poor planning or lack of understanding of the laws, may cause an unsuspecting Start-up to cross the line and actually “start to do business” in the US. Then, failure to take simple actions like filing tax returns (even without profits) or collecting sales tax can result in huge tax liabilities! READ MORE +

US venture capitalists historically insisted that they would only invest in an early-stage UK or other non-US company if the company “flipped” its corporate structure and installed a US (typically Delaware) holding company above the startup’s existing top company. For a variety of reasons this historical view is changing. Many US investors increasingly are open to the idea of investing in UK (and often Irish) holding companies without the “Delaware flip.” READ MORE +

During the holidays you often hear the saying “It is better to give than to receive” but we don’t think this should apply to having your company make unnecessary tax payments to the IRS, state or local tax authorities. Many emerging growth companies don’t have revenue in their first year or two of operations as they create a viable product, solicit customers and work to raise money from angels and venture capital firms. READ MORE +

Small businesses have been the growth engine of the US economy since the last recession. Congress has helped fuel that engine with provisions in the IRS tax code that can reward people who start and invest in certain types of small businesses. The exemption for Qualified Small Business Stock (QSBS) is an often overlooked, but potentially big tax break for both founders and those investing in small businesses. READ MORE +

Back in May of 2014 Forbes’ Entrepreneurs Blog addressed an interesting question: “Founders Can’t Scale: Fact or Fiction?” Forbes opened this article with the statement “There is a belief in the business world that founders can’t scale. Put another way, a company’s growth curve will eventually outstrip the capabilities of its founder’s ability to remain CEO.” READ MORE +

Smart tax planning is not always about safeguarding against risks and avoiding penalties. If done the right way, you will hear “the crack of the bat” in terms of improving your cash inflows now, and into the future. READ MORE +

Getting an emerging growth company up and running is one of the most exciting and stressful times any entrepreneur can face. It can involve testing the viability of the business model, acquiring paying customers, hiring and managing a new staff, testing the viability of new products or services, finding space for the business and of course starting to raise money. READ MORE +

According to Bruce Gibney (formerly with famed VC firm, Founders Fund) “Venture financing turns on three things: Money, power and ignorance.” He went on to note “These variables converge most violently in the term sheet, which proposes the basic relationship between the venture capitalist and the company. Term sheets have a set of short, formalized components, which in combination quickly become exceedingly tangled and opaque.” READ MORE +